TORONTO -- Canada's main stock index dropped Monday to start the month down along with U.S. markets as trade tensions rose.

The S&P/TSX composite index closed down 58.73 points at 16,981.47 in a broad decline led by the heavily weighted energy and financial sectors.

Markets retreated as China signalled some retaliation for the U.S. support in Hong Kong, dampening the trade outlook.

"I think the catalyst again has been this sort of back-and-forth approach to the trade negotiation," said Craig Fehr, Canadian market strategist for Edward Jones.

"Some of the rhetoric out of both the Trump and Xi administrations suggesting that both sides might be digging in a little bit as the final details on the Phase 1 portion of the deal get negotiated."

The U.S. reimposition of tariffs on steel and aluminum imports from Argentina and Brazil also suggested pessimism on the trade front, though the move doesn't have major direct macro implications, he said.

"I think it probably adds to the anxiety in the market, that any progress we've seen to this stage in these tariff negotiations isn't a one-way path to agreement."

Overall though, stock declines could be more a result of the strong gains recorded across markets in November, said Fehr.

"I view today's pullback as just a reflection of the tremendous amount of strength we've seen in the market over the past month or so, and a little bit of profit taking."

In New York, the Dow Jones industrial average ended down 268.37 points at 27,783.04. The S&P 500 index was down 27.11 points at 3,113.87, while the Nasdaq composite was down 97.48 points at 8,567.99.

The Canadian dollar averaged 75.20 US, down from an average of 75.25 cents US on Friday.

On the TSX, the energy index retreated 0.78 per cent, and the financial index was down 0.52 per cent.

Materials gained 0.28 per cent as Continental Gold rose 10.7 per cent after a takeover deal by China's Zijin Mining Group Co. Ltd., while Centerra Gold closed down 11.4 per cent after announcing that two employees were missing after a rock slide at its Kumtor mine.

The January crude contract was up 79 cents at US$55.96 per barrel and the January natural gas contract was up 4.8 cents at US$2.33 per mmBTU.

The February gold contract closed down US$3.50 at US$1,469.20 an ounce and the March copper contract was down a cent at US$2.65 a pound.

This report by The Canadian Press was first published Dec. 2, 2019.