* TSX index finishes down 86.35 points at 9,762.85
* Index falls 4.6 percent on the week
* Energy sector, down 2.48 percent, leads TSX lower
* Technical glitch disrupts data feeds for an hour (Adds details, quotes)
By Jennifer Kwan
TORONTO, May 15 (Reuters) - Toronto's main stock index erased an early gain and closed lower on Friday as energy shares fell with oil prices, which dropped further from the six-month high they reached earlier this week.
The index's energy sector fell 2.48 percent as the price of oil settled lower at $56.34 a barrel, due in part to weak global demand. [ID:nSIN460588]
Suncor Energy (SU.TO), the biggest drag on the index, dropped 2.8 percent to C$33.67, and Canadian Natural Resources (CNQ.TO) was down 2.7 percent to C$57.96. EnCana (ECA.TO) dropped 1.8 percent to C$59.23.
With the financial sector down 0.91 percent on Friday, and the mining-heavy materials group off 0.8 percent, it appeared investors were reassessing the recent run-up in stock markets, said Elvis Picardo, analyst and strategist at Global Securities in Vancouver. The TSX index has risen about 30 percent from its March lows.
"I think this week has been some sort of reality check for most investors," said Picardo, noting "lingering concerns" about the economic outlook.
The effect of lower oil overshadowed a fresh batch of reassuring U.S. economic data on Friday, as April consumer prices were unchanged and industrial output declined at a slower pace than in March. [ID:nN15177430]
The S&P/TSX composite index .GSPTSE was down 86.35 points, or 0.88 percent, at 9,762.85, with seven of its 10 main groups lower. Earlier in the session the TSX had rallied as much as 97.86 points, or 0.99 percent, higher.
On the week, the TSX index fell 4.6 percent.
The blue chip S&P/TSX 60 index .TSE60 closed 5.29 points, or 0.88 percent, lower at 593.37 on Friday.
In the last hour or so of trade the Toronto Stock Exchange and the small-cap TSX Venture Exchange were hit with a technical glitch that froze data feeds.
The data feeds, which froze at around 2:38 p.m. (1838 GMT), were restored about 15 minutes before the close, Thomas Kloet, chief executive of exchange operator TMX Group Inc (X.TO), said after the market close.
"What would happen is some of the retail participants who wanted to access the market would have to go back to maybe some of the old traditional of calling their broker to execute a trade," Kloet told Business News Network television.
He said that brokerage firms were getting updated data throughout the disruption.
In December, both exchanges were shut for almost an entire day due to a system fault linked to data feeds, but Kloet said Friday's outage was very different from the one last winter.
"In that case, there were some firmware issues that resulted in potentially different market data going out to different people," he said.
"In this case, we had some specific areas like those specific feeds that weren't operating, while the Toronto broadcast feed continued to operate in a seamless way."
The exchanges will be closed on Monday for the Victoria Day holiday.
$1=$1.18 Canadian Reporting by Jennifer Kwan; editing by Peter Galloway