(Reuters) -Canada's main stock index edged lower on Monday as technology and financial shares lost ground, but the move was restrained as investors weighed prospects of Canada reaching a trade deal with the United States.

The S&P/TSX composite index ended down 53.33 points, or 0.2%, at 26,375.80, after posting on Friday a record closing high.

U.S. President Donald Trump said that he was getting good reports as U.S. officials hold trade talks with China in London.

"As much as Trump seems to be having positive talks with China, there's some optimism that he's getting close to doing a deal with Canada as well and I think that's been a lot of the reason why the Canadian dollar is doing better and also why the TSX is back to an all-time high," said Greg Taylor, chief investment officer at PenderFund Capital Management.

The Canadian dollar edged higher against its U.S. counterpart as Canadian Prime Minister Mark Carney said his government would hit NATO's military spending target of 2% of GDP this fiscal year, five years earlier than promised, a move that some analysts say could ease the path to a trade deal with the United States.

Canada has been under pressure from the United States and other NATO allies for years to increase military funding.

Shares of jet maker Bombardier and aviation simulation and training company CAE gained 5.4% and 2.3%, respectively. Still, the industrials sector ended 0.2% lower, while financials lost 0.3% and technology was down 0.8%.

The materials sector added 0.6% as gold and copper prices climbed.

Shares of uranium supplier Cameco jumped 10.7% after a number of analysts raised their price target on the stock.

(Reporting by Fergal Smith in Toronto and Ragini Mathur in Bengaluru; Editing by Leroy Leo, Shreya Biswas and Alistair Bell)

By Fergal Smith