CANADA STOCKS-TSX posts biggest drop this year as US tariffs confirmed for Tuesday

Updates at market close

By Fergal Smith

March 3 (Reuters) - Canada's main stock index fell on Monday by the most since December as energy and technology shares led broad-based declines after U.S. President Donald Trump said that tariffs on Canada and Mexico will go into effect on Tuesday.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended down 391.88 points, or 1.54%, at 25,001.57, its lowest closing level since January 16 and its biggest decline since December 18.

Trump said that there was no chance for Mexico or Canada to prevent 25% tariffs from taking effect on Tuesday, sending financial markets reeling on the prospect of new economic barriers in North America.

Canadian manufacturing activity contracted for the first time in six months in February as an uncertain trade outlook led to firms turning the most pessimistic since the start of the COVID-19 pandemic.

The energy sector tumbled 5.1%, with Cenovus Energy Inc CVE.TO down 7.7%.

The price of oil settled nearly 2% lower at $68.37 a barrel on reports that OPEC+ will proceed with a planned oil output increase in April and worries that U.S. tariffs could hurt global economic growth and oil demand.

Technology lost 3.4%, weighed by a decline of 12.9% for electronic equipment firm Celestica CLS.TO.

Industrials lost 1.5% and the materials group, which includes metal mining shares, ended 1.2% lower.

Real estate was the only major sector to end higher as bond yields fell. Investors raised bets on the Bank of Canada cutting interest rates further this month. 0#BOCWATCH