CANADA STOCKS-TSX hits eight-month low on potential trade war escalation

By Fergal Smith

April 8 (Reuters) - Canada's main stock index gave back its earlier gains to hit a near eight-month low on Tuesday, as energy and consumer discretionary shares led broad-based declines ahead of an expected escalation of the trade war between the United States and China.

Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended down 352.56 points, or 1.5%, at 22,506.90, its fourth straight day of steep declines after the U.S. unveiled a sweeping regime of trade tariffs that spooked investors globally. It posted its lowest closing level since August 12.

The United States said that 104% duties on imports from China will take effect shortly after midnight, even as the Trump administration moved to quickly start talks with other trading partners targeted by President Donald Trump's sweeping tariff plan.

"The U.S. and China are butting heads," said Elvis Picardo, a portfolio manager at Luft Financial, iA Private Wealth. "As two of the biggest economies in the world, the collateral damage from something like that if it continues for a while could be significant."

The energy sector fell 4.8% as the price of oil extended its recent declines, settling 1.1% lower at $59.58 a barrel.

"The recession odds in the U.S. have spiked up since the (stock market) selloff," Picardo said. "If the U.S. goes into a recession, it's unlikely the rest of the world escapes that scenario and obviously you see energy demand fall on the back of that."

CEOs of Canadian oil and gas producers said they are seeking to avoid making abrupt decisions after the recent rout in oil prices.

All ten major sectors on the TSX lost ground, with consumer discretionary down 2.5% and industrials ending 1.4% lower.

Shares of Tilray Brands inc TLRY.TO tumbled nearly 21% after the cannabis firm reported third-quarter revenue that fell short of analysts' estimates.

The health care sector, which includes Tilray Brands, was down 8.5%.