CANADA STOCKS-TSX slips after US House narrowly passes Trump's tax bill

By Sanchayaita Roy

May 22 (Reuters) - Canada's main stock index edged lower in choppy trading on Thursday, mirroring its Wall Street peers, after the U.S. House of Representatives passed President Donald Trump's tax bill that is widely expected to add to the country's debt burden.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was down 0.2% at 25,795.39 points.

The Republican-controlled U.S. House of Representatives passed a sweeping tax and spending bill by a single vote. The bill would enact much of Trump's policy agenda.

If the bill becomes law, it is expected to add about $3.8 trillion over the next decade to the U.S. federal government's current $36.2 trillion debt, according to the nonpartisan Congressional Budget Office.

"Investors in Canada are going to be impacted mostly due to uncertainty... That seems to be dominating all aspects of policy at the moment, whether it's tariffs or tax spending," said Josh Sheluk, portfolio manager at Verecan Capital Management.

Longer-dated U.S. Treasury yields also stayed near their multi-month highs, reinforcing market worries about a worsening fiscal outlook in the world's biggest economy.

The Canadian 10-year yield rose to its highest level since January 16. Traders have reduced bets on Bank of Canada's interest rate cuts after domestic data on Tuesday showed inflation heating up in April.

"As we deal with our own economic issues in Canada, higher yields, especially on the long end, are not necessarily a good thing for us because it does tighten things financially a little bit," Josh added.

On TSX, energy subindex .SPTTEN was down 0.9% tracking lower oil prices.

Metal miners' shares .GSPTTMT fell 0.8% as gold slipped after hitting a nearly two-week high earlier in the session.

Conversely, heavily weighted financials .SPTTFS gained 0.4% with the kickoff of earnings season for Canada's big banks.

TD Bank TD.TO gained 3.3%, after Canada's second largest lender reported better-than-expected quarterly earnings and said it would lay off 2% of its workforce to cut costs.