CANADA STOCKS-TSX falls as Trump tariffs unnerve investors

Updates with market opening prices

By Ragini Mathur

Feb 3 (Reuters) - Canada's main stock index fell sharply on Monday as investors dumped risky assets after U.S. President Donald Trump's tariffs on Canada.

The S&P/TSX composite index .GSPTSE was down 1% at 25,263.92. Wall Street's Nasdaq .IXIC also fell over 1%.

Trump on Saturday issued 25% trade duties on Canada and Mexico, along with a 10% levy on China. Canada immediately announced retaliatory tariffs, sparking fears a trade war between two close allies.

"If tariffs will last then they could have a really negative impact on the Canadian economy and that's bad for the Canadian dollar as well," said John Ewing, CIO and Co-Founder at Ewing Morris Investment Partners.

Major brokerages including J.P. Morgan warned that Canada and Mexico could face recessions if the tariffs persist.

The Canadian dollar CAD plunged to a nearly 22-year low earlier in the session.

Among sectors, industrials .GSPTTIN fell 1.5%, with business jet exporter Bombardier BBDb.TO tumbling over 8%. Shares of Canadian auto parts makers also sank; Magna International MG.TO fell 6.5% and Linamar LNR.TO 4.4%.

Shares of alternative financial services company goeasy GSY.TO tumbled about 11%, contributing to the heavyweight financials sector falling 1.7%.

Powersports vehicles maker BRP DOO.TO slid 6.5% to its lowest since 2020, bringing down consumer discretionary .GSPTTCD sector 1.8% lower.

Healthcare .GSPTTHC fell 2.1%, the biggest sectoral loser on the index.

Domestic data released on Monday showed Canadian manufacturing activity increased at a slower pace in January as looming U.S. trade tariffs reduced confidence in the outlook.