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TSX ends down 0.3% at 24,999.79

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Eight of 10 major sectors lose ground

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Loonie gains 0.8% against the greenback

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Touches a near 3-week high at 1.4280

By Fergal Smith

Jan 6 (Reuters) - Canada's main stock index fell on

Monday and the loonie notched a near three-week high, as

investors weighed the uncertain timing of a potential shift in

Canadian political power after Prime Minister Justin Trudeau

announced plans to resign.

The S&P/TSX composite index ended down 73.75

points, or 0.3%, at 24,999.79, after three straight days of

gains.

Trudeau said he would step down in the coming months after

nine years in power and added that parliament would be

prorogued, or suspended, until March 24.

"The TSX isn't doing too much because you could say this

puts us into limbo for the next few months," said Greg Taylor,

portfolio manager at Purpose Investments.

Proroguing parliament during the first days of office of the

Trump administration could potentially add to the risk that

investors face, Taylor said.

U.S. President-elect Donald Trump is due to take office on

Jan. 20 and has threatened to impose steep tariffs on trading

partners, including a 25% tariff on imports from Canada.

Trump denied a newspaper report that said his aides were

exploring tariff plans that would only cover critical imports.

Polls show the Liberals will badly lose to the official

opposition Conservatives in an election that must be held by

late October. The Conservatives are seen as more market friendly

by some analysts.

"The (expected) change in government could usher in a policy

agenda that stimulates economic growth," said Ian Chong,

portfolio manager at First Avenue Investment Counsel.

Domestic data showed that the services economy deteriorated

for the first time in three months in December as a postal

workers' strike weighed on activity.

Eight of the 10 major sectors on the Toronto market lost

ground, including a decline of 1.6% for consumer staples.

Among the gainers was energy. It rose 1% as the price of oil

touched its highest level since mid-October before

settling 0.5% lower at $73.56 a barrel.

The Canadian dollar was trading 0.8% higher at 1.4330 to the

U.S. dollar, or 69.78 U.S. cents, as the greenback lost

ground against a basket of major currencies. The loonie touched

its strongest intraday level since Dec. 17 at 1.4280.

The Canadian 10-year bond yield rose about half

a basis point to 3.238% as yields on U.S. long-term debt moved

higher.