TSX pares monthly gain as investors gird for US trade tariffs
The facade of the original Toronto Stock Exchange building is seen in Toronto · Reuters

By Ragini Mathur and Fergal Smith

(Reuters) -Canada's main stock index fell on Friday as energy and consumer discretionary shares paced broad-based declines ahead of the expected start of U.S. trade tariffs, with the index pulling back from a record closing high the previous day.

The S&P/TSX composite index ended down 275.15 points, or 1.1%, at 25,533.10. For the week, the index was up 0.25%, while it added 3.3% in January.

U.S. President Donald Trump told reporters nothing can be done by Canada, Mexico and China to forestall tariffs and said that tariffs on oil and gas are likely by Feb. 18.

Earlier in the day, the White House said Trump will implement tariffs of 25% on Canadian and Mexican imports on Saturday and 10% tariffs on Chinese goods with immediate effect.

"It is encouraging, as we have this uncertainty with tariffs, that the economic backdrop and corporate backdrop remain favorable and that provides some relief," said Angelo Kourkafas, investment strategist at Edward Jones Investments.

Canadian gross domestic product declined by 0.2% in November, weighed by work stoppages in inland transportation and at ports, but a preliminary estimate showed GDP rebounding by 0.2% in December.

The energy sector fell 2.3%, with Imperial Oil down 6.6% after the company reported a drop in fourth-quarter profit.

The price of oil settled 0.3% lower at $72.53 a barrel, adding to its weekly decline. Some investors have expected oil to be exempted from tariffs.

Consumer discretionary was down 2% and industrials ended 1.1% lower. Nine of ten major sectors lost ground.

The exception was utilities, which added 0.2%, benefiting from a drop in bond yields. The Canadian 10-year yield touched a seven-week low at 3.062%.

(Reporting by Fergal Smith in Toronto and Ragini Mathur in Bengaluru; Editing by Tasim Zahid, Shreya Biswas and Nia Williams)