(Updates with closing figures and update about appointment of

new Canada Finance Minister in paragraph 3)

By Ragini Mathur and Divya Rajagopal

Dec 16 (Reuters) - Canada's main stock index closed down

on Monday with the market largely shrugging off the abrupt

resignation of Finance Minister Chrystia Freeland, as investors

awaited the Federal Reserve's rate decision later this week.

At the end of Monday's trade, the Toronto Stock Exchange's

S&P/TSX composite index closed down 0.4% at 25,151.33

points.

Freeland quit just hours before she was due to present a fall

economic update to parliament, a document that showwed the

Liberal government had run up a much larger 2023/24 budget

deficit than planned. The Canadian Broadcasting Corp. cited

sources as saying Public Safety Minister Dominic LeBlanc - a

member of Trudeau's inner circle - would be named finance

minister later on Monday.

"Her reference to - "costly political gimmicks, which we

can ill afford and which make Canadians doubt that we recognize

the gravity of the moment" - isn't giving investors confidence

in the government's response to proposed 25% tariffs from the

Trump administration," said Graham Priest, investment advisor,

BlueShore Financial.

"Canada likely missed deficit targets. Investors don't have

strong confidence in the current government."

Dragging energy stocks lower, oil prices,

dropped about half a percent, pressured by weaker than expected

consumer spending in China, the world's largest oil importer.

Gold prices, however, gained against a softer dollar

ahead of the Fed's policy meeting on Wednesday when the central

bank is expected to deliver a third rate cut this year and

provide hints regarding its 2025 outlook.

A survey showed U.S. manufacturing activity contracted further

in December, with a measure of factory output dropping to the

lowest level in more than 4-1/2 years.

The Bank of Canada slashed its key policy rate by 50 basis

points last week to help address slower growth, though Governor

Tiff Macklem indicated that further cuts would be more gradual

and said he does not expect a recession.

In corporate news, BlackBerry soared 15% after it

reached an agreement to sell its Cylance business to Arctic

Wolf.