April 7 (Reuters) - Canada's main stock index edged lower in choppy trade on Thursday, weighed down by uncertainty around the Russia-Ukraine peace talks and as investors awaited the release of the federal budget later in the day.

At 10:17 a.m. ET (14:17 GMT), the Toronto Stock Exchange's S&P/TSX composite index was down 56.89 points, or 0.26%, at 21,731.71.

Ukraine stepped up calls for financial sanctions crippling enough to force Moscow to end the war and dismissed comments by Russian Foreign Minister Sergei Lavrov suggesting Kyiv had presented it with a draft peace deal that deviated from proposals both sides had previously agreed on.

"The war itself is a very fluid situation and as long as it persists, because it is unpredictable and markets don't like uncertainty, that means volatility," said Shailesh Kshatriya, director, investment strategies at Russell Investments.

Canada's ruling Liberals will present their 2022 budget around 4 p.m. ET (2000 GMT). With the economy fully recovered from the pandemic, Prime Minister Justin Trudeau's Liberals find themselves under pressure to pull back from new spending for fear of further boosting runaway inflation, which is already at a 30-year high.

"Any additional spending above and beyond what the baseline expectations could be potentially inflationary, and then further complicates the job of the central bank even more," Kshatriya said.

Money markets are bracing for a rare 50 basis point interest rate hike from the Bank of Canada next week.

The energy sector rose 0.3%, while the materials sector added 0.5% to offset some of the losses from the financials and healthcare stocks which fell 0.9% and 3%, respectively.

HIGHLIGHTS

CI Financial Corp 6.9% as the asset and wealth manager plans to spin off up to 20% of its U.S. wealth management business through an initial public offering.

On the TSX, 108 issues were higher, while 126 issues declined for a 1.17-to-1 ratio to the downside, with 42.56 million shares traded.

The largest percentage gainers on the TSX were Denison Mines Corp, which jumped 8.4% followed by Nexgen Energy Ltd , which rose 7.9%.

Tilray Inc fell 5.9%, the most on the TSX, while the second biggest decliner was Canopy Growth Co, down 4.2% after BOFA Global Research cut its price target on the stock.

The TSX posted 14 new 52-week highs and four new lows.

Across all Canadian issues there were 32 new 52-week highs and 20 new lows, with total volume of 70.99 million shares. (Reporting by Devik Jain in Bengaluru; Editing by Anil D'Silva)