* Financials drop on economic worries, Madoff scandal
* Materials lone bright spot as gold rises. (Adds details, comments)
By Cameron French
TORONTO, Dec 15 (Reuters) - Toronto’s main stock index fell on Monday as energy prices gave back early gains, while economic worries and concern over the impact of a massive U.S. investment fund fraud weighed on financial issues.
Financials dropped 2.34 percent, led by Sun Life Financial, (SLF.TO), which fell 4.9 percent to C$23.40, and National Bank of Canada NA.TO, which slid 7.1 percent to C$28.32.
The sector, which has plunged under the weight of recession worries and a financial crisis, got no help from revelations by several global institutions of exposure to a massive $50 billion fraud allegedly masterminded by U.S. investment manager Bernard Madoff.
“The current economic climate doesn’t help, and then to have a massive fraud with all its implications of who knows who may be affected,” said Elvis Picardo, analyst and strategist at Global Securities in Vancouver.
The S&P/TSX composite index .GSPTSE ended the session down 53.62 points, or 0.63 percent, at 8,461.83.
Nine of the 10 TSX subgroups fell during the session, with materials showing the only gains, rising 3.55 percent on the back of a 2 percent gain in gold prices.
While gold supported the sector, several base metals players were also strong, despite a mixed day for base metals prices.
“I think the sentiment has shifted in that people are thinking this sector has been punished long enough. There are signs that it may be bottoming,” said Joe Ismail, technical analyst at Maison Placements.
Quadra Mining QUA.TO rose 5.5 percent to C$2.89, while Teck Cominco TCKb.TO climbed 3.7 percent to C$5.65. Earlier, Teck announced the temporary shutdown of its Pend Oreille zinc mine, citing reduced demand and persistent weakness in zinc prices. [ID:nBNG91937]
After three months of crippling losses, Canada’s main stock index has traded largely sideways in December following a sharp drop on the first day of the month.
Energy stocks were higher for much of the session, but then fell as oil prices gave up early gains. Oil had strengthened on expectations OPEC will agree to hefty production cuts.
That sector ended down 0.25 percent, while the tech sector dropped 2.4 percent on the back of sector heavyweight Research In Motion RIM.TO, down 6.1 percent at C$45.52.
U.S. stocks also took modest losses.
The Dow Jones industrial average .DJI retreated 65.15 points, or 0.75 percent, to 8,564.53, while the Nasdaq composite .IXIC eased 32.38 points, or 2.1 percent, to 1,508.34.
The blue-chip S&P/TSX 60 index .TSE60 slid 3.48 points, or 0.67 percent, to 512.28.
$1=$1.23 Canadian Editing by Peter Galloway