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* TSX down 34.39 points, or 0.27 percent, at 12,715.51 * Gold miners, railways weigh heavily * Heavyweight bank, energy shares make modest gains By Alastair Sharp TORONTO, April 1 (Reuters) - The main Canadian stock index dropped on Monday as gold mining stocks again weighed heavily and as railway stocks fell after U.S. data showed slowing manufacturing activity. The resources-rich index has fared poorly in recent weeks in comparison with record highs hit on markets south of the border as investors have shied away from some energy plays and have retreated drastically from gold miners. "The bottom line is cyclicals are hated across the globe and we've got our fair share of them," said Barry Schwartz, a portfolio manager at Baskin Financial Services. "I don't know when that's going to turn around, but it's not looking good." Industrial stocks also weighed on Monday, with Canada's two main railways leading the index's fall. Canadian National Railway Co dropped 1 percent to C$101.13, and Canadian Pacific Railway Ltd was down 1.7 percent at C$130.33. The pair pulled back after data showed the pace of expansion in the U.S. manufacturing sector slowed unexpectedly last month, according to the Institute for Supply Management . Both have moved sharply higher in the past year as investors view them as likely beneficiaries as oil producers struggle to move their product to market via pipelines. "They've surprised everybody, caught everybody off guard over the past year or so with the price explosion. I think a lot of that is hype and pomp," Schwartz said. The Toronto Stock Exchange's S&P/TSX composite index was down 34.39 points, or 0.27 percent, at 12,715.51 a little over an hour into the session. Goldcorp Inc lost 0.5 percent to C$34.02 and Barrick Gold Corp, the world's largest gold miner, fell 0.7 percent to C$29.64. Barrick has lost about 28 percent of its value since September last year. Shares of China Gold International Resources Corp Ltd dropped almost 13 percent to C$3.35 after a landslide at an exploration area near the gold miner's Jiamia mine in Tibet trapped 83 people. Gold miners, have fallen almost 16 percent so far this year, while the index's broader materials sector is down almost 11 percent in the same period. The price of bullion slipped 4 percent in the first quarter as the euro stayed weak against the greenback and stock markets rallied. In a research note on Monday, Bank of America Merrill Lynch warned that year-over-year declines in gold, silver and copper prices during the first quarter, combined with relentless cost pressures, are likely to result in lower quarterly earnings from precious metal miners. The brokerage firm said this expectation may put pressure on the share prices of precious metal miners ahead of first-quarter earnings reports that are set to begin later this month. Modest gains in heavyweight energy and banking stocks helped lessen the Toronto index's pain. Pipeline builder TransCanada Corp rose 0.9 percent to C$48.95 and oil sands player Suncor Energy Inc gained 0.6 percent to C$30.62. Toronto-Dominion Bank gained 0.3 percent to C$84.04 and Royal Bank of Canada added 0.1 percent to C$61.27.