(Updates with morning prices)

By Ragini Mathur

June 16 (Reuters) - Canada's main stock index hit a new

all-time high on Monday, led by gains in information technology

stocks, with investors shaking off concerns around escalating

Middle East tensions and instead focusing on the Group of Seven

summit.

The S&P/TSX composite index was up 0.6% at

26,670.69 points. The commodity-heavy benchmark index fell 0.4%

on Friday after a record setting run last week, buoyed by rising

commodity prices, lower-than-expected U.S. inflation data and

optimism around the U.S.-China trade deal.

Focus is on the G7 meeting in Canada, where a draft

statement said seven countries' leaders will work to safeguard

market stability, including energy markets.

The discussions are also expected to center on advancing

trade deals, with investors closely watching prospects of Canada

moving closer to a trade agreement with the U.S.

Meanwhile, geopolitical tensions continued to dominate

headlines as the conflict between Israel and Iran showed no

signs of cooling, but oil prices edged lower after a 7% surge on

Friday.

"Investors are starting to price in that the conflict in the

Middle East will be contained," said Ian Chong, portfolio

manager at First Avenue Investment Counsel.

This week's Fed monetary policy decision presents the next

major challenge for markets. While the U.S. central bank is

widely expected to keep interest rates unchanged on Wednesday,

investors will watch for hints about potential rate cuts in the

coming months.

"Fed will probably be on hold, especially with the Middle

Eastern tension potentially driving oil prices higher, which is

inflationary and I don't think the rhetoric will necessarily

change coming out of the Fed," Chong added.

On TSX, information and technology sector was the

top performer, up 1.4%, as the shares rebounded from Friday's

sharp losses.

Consumer discretionary and the heavy-weight

financials also gained ground, advancing over 1% each.

On the downside, the energy sector fell the most,

down 1.3%, tracking oil prices.

Metal mining shares were also trading 0.5% lower

as gold prices also slipped after hitting nearly an eight-week

high.