June 10, 2016 / 8:52 PM / a year ago

CANADA STOCKS-TSX suffers largest drop since February as oil slides

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* TSX closed down 202.48 points, or 1.42 percent, at 14,037.54

* It touched its lowest since June 1 at 14,003.74.

* All of the index's 10 main groups ended lower

* Index fell 1.3 percent for the week

By Fergal Smith

TORONTO, June 10 (Reuters) - Canada's main stock index posted its largest drop since February on Friday, falling to a one-week low as energy stocks tumbled with oil prices and global equity markets broadly moved lower.

The index ended 1.3 percent lower for the week after having touched on Wednesday its highest in nearly 10 months at 14,450.91.

"A large part (of the sell-off) has to do with profit taking," said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.

Concern that low bond yields are signaling deflation has contributed to negative sentiment, while trend following investors sold stocks as the market turned lower, Nakamoto added.

The energy group tumbled 3.8 percent as oil slipped from 2016 highs hit earlier in the week. U.S. crude oil futures settled $1.49 lower at $49.07 a barrel.

Canadian Natural Resources declined 3.9 percent to C$36.61. The company and Cenovus Energy both said they had restarted operations at oil sands facilities in Alberta on Thursday after a wildfire threat dissipated.

Suncor Energy Inc fell 2.3 percent to C$34.38.

The financials group slipped 1 percent, with Royal Bank of Canada down nearly 1 percent at C$78.57 and Bank of Nova Scotia off 1.6 percent at C$65.25.

The Toronto Stock Exchange's S&P/TSX composite index closed down 202.48 points, or 1.42 percent, at 14,037.54. It touched its lowest since June 1 at 14,003.74.

All of the index's 10 main groups were in negative territory and decliners outnumbered gainers by 9.09 to 1.

Barrick Gold Corp was among the few stocks that advanced, rising 0.4 percent to C$25.00, while spot gold rose to a fresh three-week high as investor risk aversion lifted appetite for the metal.

Still, the materials group, which includes precious and base metals miners and fertilizer companies, fell 1.3 percent, while industrials dropped 1.8 percent.

Canada added far more jobs than expected in May as hiring picked up in construction and manufacturing, although a drop in the unemployment rate to a 10-month low stemmed from fewer people looking for work. (Reporting by Alastair Sharp; Editing by Phil Berlowitz and James Dalgleish)

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