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* Most sectors in the red, financials drag most
* Underlying commodity prices pressure resource issues (Adds details)
TORONTO, Feb 2 (Reuters) - Toronto's main stock index fell broadly on Monday morning, hurt by weaker banks and lower commodity prices, as concern mounted about the global economy and deteriorating corporate profits.
Oil fell below $41 a barrel as a deepening U.S. recession shrank demand in the world's top fuel burner and evidence mounted of a global downturn, while gold slipped as short-term investors took profits after the precious metal hit three-month highs last week.
Both served to push the materials and energy sectors lower, down 0.7 percent and 1.76 percent, respectively.
Financials slumped 2.44 percent, swept up in concerns about the recession, the ailing U.S. bank sector, and news that ratings agency Moody's cut Britain's Barclay's Bank on expectations of "significant" further losses.
"It still looks like it's in tough shape," said Sal Masionis, a stockbroker at Brant Securities. "Until the banking system gets straightened out we're in tough shape."
Among the key issues driving the index lower were all five big Canadian banks, led by Royal Bank of Canada (RY.TO), down 2.7 percent at C$29.60. Energy giant EnCana (ECA.TO) fell 1.2 percent to C$53.92, while Canadian Natural Resources (CNQ.TO) lost 2.96 percent to C$42.59.
At 10 a.m. (1500 GMT), the S&P/TSX composite index .GSPTSE was down 125.93 points, or 1.45 percent, at 8,568.97. Nine of the TSX's 10 main groups were lower.
The index at one point hit 8,533.63, its lowest level since January 23.
The healthcare group was the lone advancer, propped up by a 2.2 percent gain in MDS Inc MDS.TO. The life sciences company said it named an independent board to look at all alternatives to boost shareholder value, but set no timetable for a decision. [ID:nN02531978]
The resource-rich index fell 3.25 percent in January after bursting out of the gate early in the month. The new month brings hopes of faring better, but a slew of earnings reports due out in next few weeks may provide more doses of bad news to mirror the economic gloom.
Key Canadian companies due to report earnings this week are energy players TransCanada Corp (TRP.TO) and Husky Energy (HSE.TO), but the pace will pick up in the following weeks when other resources companies, and blue-chip banks and insurers unveil their results. (Reporting by Ka Yan Ng; Editing by Jeffrey Hodgson)