* S&P/TSX composite down 0.62 percent at 11,873.17.
* Producers hurt by commodity price drop after China news (Adds details, quotes)
By Claire Sibonney
TORONTO, Jan 12 (Reuters) - Toronto's main stock exchange faltered on Tuesday for the second straight session, as commodity prices dropped after China took it strongest step yet towards tightening monetary policy.
China rocked global financial markets with a surprise increase in banks' required reserves, a move that hit gold and platinum prices and knocked the euro lower versus the dollar. [MKTS/GLOB]
"China's decision to change some of the banking structure with bigger deposits certainly had an effect in terms in trying to cool some of the demand," said Brian Pow, vice president , research and equity analyst at Acumen Capital Partners in Calgary.
"The focus is more on how trade is going to be with China this year."
The Toronto Stock Exchange's energy and mining sectors slumped after the open, with Suncor Energy Inc (SU.TO) dropping 1.48 percent to C$38.01.
At 10:15 a.m. (1515 GMT) the S&P/TSX composite index .GSPTSE was down 73.96 points, or 0.62 percent at 11,873.17.
Oil also fell to around $81 a barrel from a 15-month high as forecasts for milder weather in the U.S. Northeast signalled lower demand in the world's largest heating oil market. [O/R]
Stocks helping to offset the market's decline included Sino-Forest Corp TRE.TO, which rose 4.7 percent to C$21.45.
The firm, which operates mainly in China, said it acquired Homix Limited, a Chinese research and development and recomposed wood manufacturer, in a $7.1 million deal. [ID:nWNAB3193]
$1=$1.03 Canadian Reporting by Claire Sibonney; editing by Jeffrey Hodgson