(Updated at 10:10 a.m. ET/ 1510 GMT)

By Nikhil Sharma

Nov 26 (Reuters) - Canada's main stock index fell on

Tuesday, hurt by energy shares, as President-elect Donald

Trump's pledge to impose big tariffs on top U.S. trading

partners, including Canada, weighed on investor sentiment.

The S&P/TSX composite index was down 117.7 points,

or 0.46%, at 25,292.65.

Trump on Monday said he would impose a 25% tariff on imports

from Canada and Mexico until the countries clamped down on

drugs, particularly fentanyl, and migrants crossing the border.

The proposed measures could also violate the terms of a

free-trade deal among the United States, Mexico and Canada.

Trump separately outlined "an additional 10% tariff, above

any additional tariffs" on imports from China.

"These types of threats are mostly designed to extract

concessions," said Angelo Kourkafas, investment strategist at

Edward Jones Investments, adding they are, however, "impacting

sentiment in the short term."

Canada sends a majority of its exports to the United States,

including energy products.

The energy sector fell 2.2% despite higher oil prices,

leading sectoral losses, while markets assessed Trump's aim to

increase U.S. crude production.

The loonie fell to its lowest levels since May 2020

against the U.S. dollar.

"A lower Canadian dollar could trigger some inflation

concerns for the goods that are imported," Kourkafas said.

The Bank of Canada said inflation should fade into the

background again as the annual rate settled back at 2%, allowing

consumers and businesses to spend and invest with confidence.

The TSX is expected to rise in 2025 on lower borrowing costs

and a cheaper valuation than the U.S. market, but returns could

slow after investors potentially front-loaded much of the

positive news, a Reuters poll found.

Among individual stocks, Alimentation Couche-Tard ( ANCTF )

said it would continue to pursue a deal with Japan's Seven & i ( SVNDF )

.

The company, whose shares fell 1%, reported third-quarter

earnings below estimates on Monday.