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* TSX ends down 125.79 points, or 0.96 pct, at 12,972.03.
* All 10 of the TSX's main groups end lower (Updates to close, adds details, quotes)
TORONTO, June 15 (Reuters) - Toronto's main stock index closed sharply lower on Wednesday, falling back below 13,000, as disappointing U.S. economic data and escalating fears over Greek debt weighed on investor appetite and commodity prices.
Energy shares slipped 1.7 percent and played the biggest role in leading the market lower. The sector weakened with the price of oil, which slid more than 4 percent on the back of a stronger U.S. dollar and patchy U.S. data. [O/R]
Suncor Energy (SU.TO) was the most influential decliner on the index, down 2.7 percent at C$37.36.
Dampening investor sentiment were reports that showed U.S. consumer prices hit their highest level in nearly three years in May, while a regional factory gauge contracted this month, suggesting the economy faces a troubling mix of weakness and inflation. [ID:nN15281293]
Economically sensitive financial stocks fell 1.1 percent. Besides the soft U.S. economic numbers, they were pressured by a warning from Moody's on the credit ratings of French banks BNP Paribas, Credit Agricole and Societe Generale for a possible downgrade, citing their holdings of Greek public and private debt. [ID:nL3E7HF0A4].
While Canadian banks have little or no exposure to Greek debt, they often trade in sympathy with their global peers. Toronto-Dominion Bank (TD.TO), down 1.4 percent at C$78.48, and Royal Bank of Canada (RY.TO), off 1.1 percent at C$53.78, rounded out the top three decliners.
Meanwhile, Greek Prime Minister George Papandreou will form a new government on Thursday and seek a vote of confidence, he announced after protests against a new austerity plan turned violent, with the country teetering on the brink of default.. [nLDE75E041]
"When you start getting these sort of tensions and riots in Europe, the projection is that perhaps we are going to get slower growth yet into the second half of the year, so you are getting some of this selloff occurring," said John Kurgan, a senior market strategist at Lind-Waldock.
Weak domestic economic data did not help investor confidence.
The Japanese tsunami dragged down Canadian manufacturing sales in April and home sales dipped in May, reports on Wednesday showed, offering further evidence the economy hit a soft patch in the second quarter. [ID:nN15282152]
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended down 125.79 points, or 0.96 percent, at 12,972.03.
The decline was the 10th in the last 12 sessions, and wiped out most of Tuesday's 1.22 percent rally.
"The market is trying to find a bottom here, a base it can build on, and until the market can absorb bad news its going to drift," said Bruce Latimer, a trader at Dundee Securities.
"We had what can maybe be deemed as a false start yesterday with the equities trying to go a little better," added Latimer.
All 10 of the index's main groups finished lower, including weighty materials group which fell 0.3 percent.
Bucking the broader trend was the gold subsector, up 0.3 percent, as the price of bullion held firm on safe-haven demand.
Gold miners made up four of the top five gainers on the index, led by Goldcorp Inc (G.TO), up 2.6 percent at C$46.76, Barrick Gold (ABX.TO), up 1.2 percent at C$43.05, Kinross Gold (K.TO), up 1.1 percent at C$15.11, and Agnico Eagle (AEM.TO), which rallied 1.4 percent at C$60.61.
Air Canada ACa.TO shares rose nearly 7 percent to C$2.01. The union representing striking sales and customer service agents said it is determined to reach a contract agreement before the federal government forces employees back to work. [ID:nN15126649]
Sino-Forest TRE.TO fell another 4 percent to C$3.22 in volatile trade after the Chinese forestry company's response to fraud allegations by short-seller Muddy Waters failed to convince many investors. [ID:nN15284245]
($1=$0.98 Canadian) (Reporting by Trish Nixon and Claire Sibonney; editing by Rob Wilson)