CANADA STOCKS-TSX set for weekly gain despite concerns over looming US tariffs

Updates with market opening prices

By Ragini Mathur

Jan 31 (Reuters) - Canada's main stock index struggled to find direction on Friday as investors were uncertain whether U.S. President Donald Trump would follow through on his threats to impose tariffs on Canada and Mexico this weekend.

The S&P/TSX composite index .GSPTSE was down 0.03% at 25,800.17.

For the week, the index is set to post gains of over 1%, its third straight weekly rise, helped by strong earnings from Wall Street.

On a monthly basis, the TSX was trading 4.3% higher.

The technology .SPTTTK sector rose over 2% on Friday, mirroring gains in the tech-heavy Nasdaq following positive sales forecast from Apple AAPL.O.

Datawise, Canada's economy contracted more than expected in November as activity across a majority of sectors shrank due to work stoppages in inland transportation and at ports.

A preliminary estimate shows that GDP is likely to rebound by 0.2% in December.

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

The Bank of Canada has been concerned about the slow pickup in economic activity despite several rounds of rate cuts. It has reduced interest rates by a cumulative 200 basis points since June to 3%.

Countering the gains on the TSX, the energy .SPTTEN sector lost 1%, tracking lower crude prices. O/R

Domestic investors were unsettled as they approached Trump's self-imposed Feb. 1 deadline to issue tariffs on trading partners, including Canada.

Trump plans to impose a 25% tariff on imports from Canada, which sends 75% of all goods and services exports to the United States. The punitive duties could disrupt nearly $1.6 trillion in annual trade.

In single stocks, Imperial Oil IMO.TO shares fell 2% as the oil producer posted a fall in fourth-quarter profit.