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* TSX falls 119.12 points, or 0.87 percent, to 13,616.16 * All of the 10 main index sectors decline * TransCanada steady ahead of Keystone pipeline review * CN Rail slips after quarterly report By John Tilak TORONTO, Jan 31 (Reuters) - Canada's main stock index fell sharply on Friday as persisting concerns about emerging markets, coupled with mixed economic data out of Europe and the United States, fueled declines in every major sector. Investors also had an eye on TransCanada Corp, whose shares were little changed, ahead of a U.S. environmental review of its proposed Keystone XL oil pipeline that is likely to say the project will not appreciably increase carbon emissions. Data from the euro zone showed inflation fell in January, missing market expectations and coming below the European Central Bank's target. Separate figures indicated that U.S. consumer spending rose more than expected in December, but weak income growth suggested the world's biggest economy could cool off in the first quarter. Global markets have had a turbulent ride in recent days as volatility in some emerging market currencies and doubts about the pace of China's economic growth has hit investor sentiment hard. Investors also took in a move by the U.S. Federal Reserve to further scale back its stimulus program. The Toronto market looked set to end a volatile week in the red, capping off a string of steep dives and sharp gains. "It shows a lack of faith in markets in general, and it just tells me that the market is vulnerable," said David Cockfield, managing director and portfolio manager at Northland Wealth Management. "I'm re-examining my ideas of what's going to happen in our market," he added. "I'm becoming distinctly more negative on the market's prospects for the year." The Toronto Stock Exchange's S&P/TSX composite index was down 119.12 points, or 0.87 percent, at 13,616.16. All of the 10 main sectors on the index were in the red. Financials, the index's most heavily weighted sector, dropped 1.2 percent. Royal Bank of Canada gave back 1.3 percent to C$68.81, and Toronto-Dominion Bank slipped 1.3 percent to C$95.90. With a fall in oil prices, energy shares were down 0.8 percent. Suncor Energy Inc dropped 1 percent to C$36.14, and Talisman Energy Inc fell 1.3 percent to C$11.91. Among pipeline companies, TransCanada was trading at C$47.91, while Enbridge Inc was steady at C$46.55. In corporate news, Canadian National Railway Co reported higher quarterly earnings late on Thursday, but the results were tempered by extreme winter weather in December and came in slightly below estimates. The stock fell 1.6 percent to C$58.39.