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TSX closes 0.7% lower

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Materials, tech stocks among biggest losers

(Updates to close)

By Nivedita Balu

Dec 30 (Reuters) - Canada's main stock index closed

lower on Monday tracking markets south of the border as

investors ease into the holiday week, taking stock of market

conditions heading into the new year and booking profits.

The S&P/TSX composite index was down 175.81

points, or 0.71%, at 24,620.59.It has advanced nearly 18% this

year and is set to record its best since 2021.

Toronto tracked US markets where it closed lower in light

volume in the second-to-last trading session of an eventful

year.

The TSX's materials and technology

indexes were among the biggest losers closing down 1.8% and 1.3%

respectively.

The energy index, which tracks oil prices, rose

0.72% as investors bet on a drop in temperatures across the U.S.

and Europe over the coming weeks to boost diesel demand.

"The general mood over the past couple of weeks has been

that maybe we were a little bit too optimistic coming out of the

US presidential election results than we should have been," said

Josh Sheluk, Portfolio Manager at Verecan Capital Management.

"Perhaps people are realizing now that if we do get the

stimulus that people were expecting, that probably also comes

with higher interest rates and that might be a bit self

limiting."

Trading volumes are expected to be thin in the

holiday-shortened week, with markets closed on Wednesday for the

New Year.

Market participants are also bracing for policy changes in

the United States with Donald Trump's return to the White House.

Trump has pledged a 25% tariff on all imports from Canada,

in a blow to the country's crude exports to the United States.

"I think the main thing is, where people have significant

gains, they want to lock them in and then maybe reassess market

conditions as we enter into the new year," said Michael Sprung,

president at Sprung Investment Management.