(Updates with morning prices)

By Pranav Kashyap

Feb 18 (Reuters) - Canada's main stock index slipped on

Tuesday as investors digested a key data release, while an

uptick in bond yields also contributed to the downward momentum.

The Toronto Stock Exchange's S&P/TSX composite index

was down 0.1% at 25,499.71.

January's annual inflation rate in Canada rose slightly to

1.9% from December.

While lower prices, thanks to a sales tax reprieve,

provided some relief, they were partially countered by rising

costs of gasoline and natural gas, as shown in Tuesday's data.

The yield on Canada's 10-year benchmark bond

and the 5-year benchmark bond climbed to their

highest points in three weeks, exerting pressure on equities.

The utilities sector, which is often considered a

bond proxy, slipped 0.6%.

"There is clear evidence that underlying inflation pressures

are building. Given the tariff threat hanging over the economy,

we still think the odds slightly favour another cut from the

Bank of Canada next month, but it is shaping up to be a close

call," said Stephen Brown, deputy chief North America economist

at Capital Economics.

Consumer staples led the sectoral declines,

falling 0.9%.

Limiting overall losses, materials rose 0.8%

as it tracked a jump in gold prices driven by persistent demand

for safe-haven assets.

In Riyadh, U.S. and Russian officials engaged in the

highest-level discussions to date between the two former Cold

War rivals, focusing on ending the conflict in Ukraine.

Meanwhile, the threat of tariffs somewhat receded as global

attention shifted to the developments in the Ukraine conflict

involving U.S. President Donald Trump and his Russian

counterpart, Vladimir Putin.

In other stocks, Fortuna Mining ( FSM ) lost 6.7% after

CIBC downgraded its rating on the miner to "underperform" from

"neutral".

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