CANADA STOCKS-TSX rises to 5-week high as US holds back on trade tariffs

Updates at market close

By Fergal Smith

Jan 20 (Reuters) - Canada's main stock index climbed to a five-week high on Monday, helped by gains for energy and industrial shares, as investors expressed relief that Canada would avoid immediate U.S. trade tariffs from President Donald Trump.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended up 103.66 points, or 0.4%, at 25,171.58, its fifth straight day of gains and the highest closing level since Dec. 13.

Trump will issue a broad trade memo that stops short of imposing new tariffs on his first day in office but directs federal agencies to evaluate U.S. trade relationships with China, Canada and Mexico, a Trump administration official said. Trump had threatened an immediate 25% tariff on Canadian goods.

"There is a collective sigh of relief," said Greg Taylor, a portfolio manager at Purpose Investments. "This is probably a lot more measured than some had feared and that's why we're seeing more green on the screen today and a bit of a bounce in the energy stocks and some of the materials."

Trading volumes were lighter than usual with U.S. markets closed for Martin Luther King Jr. Day.

"Tomorrow we'll get a way better indication once there's more players back but so far I think this is a pretty welcome start to the next four years," Taylor said.

Canadian firms see improved demand and sales in the coming year, largely fueled by interest rate cuts, but are concerned about the potential damage from promised U.S. policies, the Bank of Canada said.

Industrials rose 0.8%, helped by a gain of 7.2% for the shares of business jet exporter Bombardier Inc BBDb.TO.

Energy was up 2.3% despite lower oil prices. Shares of Canadian Natural Resources Ltd CNQ, Canada's largest oil and gas producer, added 4.4%.

The materials group, which includes metal mining shares, ended 1.2% higher as gold XAU= prices rose.

(Reporting by Fergal Smith in Toronto and Nikhil Sharma in Bengaluru. Editing by Tomasz Janowski, Mark Potter and David Gregorio)

((fergal.smith@thomsonreuters.com))