TORONTO (Reuters) - Canada's main stock index suffered its biggest one-day fall in more than a month on Tuesday, with energy stocks slumping 2.4 percent as fears of an oil supply glut haunted investors.
Oil prices turned lower, dragging U.S. crude CLc1 below $40 a barrel on persistent worries of a glut after peaking above $50 in early June.
"That definitely weighs on sentiment, especially where Canadian investors are concerned," said Elvis Picardo, strategist at Global Securities in Vancouver.
Energy stocks accounts for almost one-fifth of the index's weight.
The most influential drags included major oil and gas producers Suncor Energy Inc (SU.TO), which fell 3.1 percent to C$34.06, Cenovus Energy (CVE.TO), which lost 4 percent to C$17.95, and Canadian Natural Resources Ltd (CNQ.TO), down 1.9 percent at C$38.79.
Pipeline operator Enbridge Inc (ENB.TO), which a source said had won an auction to invest in one of Europe's largest offshore wind power projects, lost 1.4 percent to C$52.94.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended down 105.73 points, or 0.73 percent, at 14,477.01.
That was its sharpest fall since June 27.
Eight of the index's 10 main groups fell, with decliners outnumbering gainers by almost 2-to-1.
The financials group slipped 1.2 percent while the small healthcare sector lost 3.7 percent.
Valeant Pharmaceuticals International Inc (VRX.TO) fell 4.6 percent to C$27.73, catching up to its U.S.-listed share losses on Monday after pharmacy benefit manager Express Scripts said it would exclude a Valeant treatment from insurance coverage.
Canada's stock market was closed on Monday for a public holiday.
The materials group, which includes precious and base metals miners and fertilizer companies, added 2.0 percent.
Gold XAU= rose to a four-week high as weak U.S. data tempered expectations for a near-term U.S. interest rate hike.
"Gold is still doing OK, but gold miners have just gone through the roof," Picardo said.
Silver Wheaton SLW.TO advanced 5.1 percent to C$38.31 after signing an $800 million deal to acquire more gold from a copper mine owned by Brazil's Vale (VALE5.SA).
The pace of Canadian manufacturing growth inched higher in July, data showed, as rising new orders and overall output offset dragging export orders.
Reporting by Alastair Sharp; Editing by Alden Bentley and James Dalgleish