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* TSX down 160.42 points, or 1.1 pct, at 14,092.35
* All 10 index sectors weaker
* U.S. oil futures end above $105 a barrel
* Gold hits record above $1,440, silver highest since 1980 (Adds details, comments)
By Claire Sibonney
TORONTO, March 7 (Reuters) - Toronto's main stock index fell sharply on Monday, retreating from a near three-year high on fears that rising oil prices and instability in North Africa and the Middle East would damage the global economic recovery.
The index's energy sector ended down 1.5 percent, backing away from an early rally, as increasing violence in Libya and rumors that leader Muammar Gaddafi was seeking an exit deal contributed to a volatile day for oil prices. Still, U.S. crude futures settled higher, above $105 a barrel. [O/R]
"The global macro environment seems to have entered a new phase of uncertainty and that could have triggered a bout of profit-taking on the TSX," said Elvis Picardo, an analyst and strategist at Global Securities in Vancouver, noting the TSX hit a 32-month high shortly after the open.
Picardo said the uncertainty is measured by the fact that both energy and gold-mining issues were down sharply despite oil prices well above $100 a barrel and gold reaching a record high above $1,400 an ounce. [GOL/]
Suncor Energy (SU.TO) dropped 1.8 percent to C$45.57, and Canadian Natural Resources (CNQ.TO) plunged 3.2 percent to C$48.10.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended down 160.42 points, or 1.13 percent, at 14,092.35. Earlier in the session, it rose as high as 14,329.49, its highest level since July 2008.
All of the index's 10 main sectors were weaker.
The index's financial group fell 0.5 percent with Toronto-Dominion Bank (TD.TO) shedding 0.9 percent to C$82.88 and Bank of Montreal (BMO.TO) losing 0.6 percent to C$61.36.
"Investors are trigger happy at this point ... the fact remains that the TSX remains just a few hundred points from its all-time high and there definitely is a section of the market that feels that level for the TSX may not be sustainable in the short term," Picardo said.
"As long as we have this continued uncertainty it's going to be a case of selling on the rallies rather than buying the dips."
The materials sector, home to base-metal miners and fertilizer producers -- both proxies for economic growth -- finished down 1.3 percent, as the price of copper suffered its biggest one-day decline in nearly four months. [MET/L]
Fertilizer producer Potash Corp (POT.TO) tumbled 3.2 percent to C$57.49, and diversified miner Teck Resources TCKb.TO lost almost 3 percent at C$52.53.
"Appetite for risk has been reduced and everyone is building more of a defensive portfolio right now," said Francis Campeau, broker at MF Global Canada in Montreal, noting a similar move lower on U.S. stock markets.
Precious metals miners also shifted from gains to losses, tracking swings in oil, as the price of gold climbed into record territory and silver hit its highest point since 1980.
The subsector was off 0.6 percent as Goldcorp (G.TO) slipped 0.2 percent to C$48.62 percent. However, Barrick Gold Corp (ABX.TO) rose 0.3 percent to C$51.53 and Silver Wheaton SLW.TO advanced 0.2 percent to C$43.74.
($1=$0.97 Canadian) (Reporting by Claire Sibonney; editing by Peter Galloway)