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* TSX closes down 65.71 points, or 0.51 pct, at 12,707.41 * Gloomy global outlook hurts resource companies * TransCanada gains after environment report on Keystone By Alastair Sharp TORONTO, March 4 (Reuters) - Toronto's main stock index closed lower on Monday, led by a drop in the heavyweight mining and energy sectors, as weaker oil prices and global economic worries hurt investor sentiment. The decline was slightly offset by a gain in TransCanada Corp after a U.S. government report said its contentious Keystone XL pipeline project would not likely increase the pace of development of Canada's oil sands. But most resource-related stocks were lower following weak Chinese manufacturing and services sectors data that added to concern about slower growth in the world's second-largest economy. A lack of progress in forming a new government in Italy and broad U.S. spending cuts that automatically kicked in on Friday added to the gloom. "There's still a lot of uncertainty, the sequester situation in the United States for one," said Irwin Michael, portfolio manager at ABC Funds in Toronto. "With gold down, oil down - you've got two basic commodity prices which will clearly affect the TSX." The Toronto Stock Exchange's S&P/TSX composite index closed down 65.71 points, or 0.51 percent, at 12,707.41. "We're back to the worries about the international economic situation. It started with the Italian election and then the economic numbers coming out of Germany and China," said John Kinsey, a portfolio manager at Caldwell Securities. "Europe and China still seem quite sluggish, as does Japan." Materials stocks, which include miners, played the biggest role in leading the market lower, hurt by a 2.8 percent decline in gold producers. Barrick Gold Corp, down 2.7 percent to C$29.39, was a major weight. Gold miners fell as the price of bullion eased, hurt by weaker demand for gold-backed exchange-traded funds. Energy stocks also stumbled with the price of the underlying commodity. U.S. oil futures fell to their lowest level in 2013 on Monday, declining for a third consecutive session in reaction to slowing growth in China and indicators that oil markets are amply supplied. Canadian Natural Resources Ltd, down 2.5 percent to C$31.26, played the biggest role of any single stock in leading the market lower. Partly offsetting the losses was pipeline company TransCanada. Its shares closed up 1 percent at C$48.33, as Friday's environmental report about the Keystone pipeline increased speculation the project will win U.S. clearance. A final U.S. decision on approving or rejecting Keystone is expected by August.