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*Toronto, TSX Venture exchanges open after Wednesday halt
*TMX Group shares sag 0.7 percent after outage
*Energy leads TSX lower as oil falls below $40 a barrel (Adds quote, details)
By Jennifer Kwan
TORONTO Dec 18 (Reuters) - Toronto's main stock index fell on Thursday morning, led lower by energy stocks as the price of oil tumbled, with trading restarting after the Toronto Stock Exchange was shut down Wednesday due to a technical glitch.
At the open, all eyes were on the market's operations as the outage on Wednesday frustrated users and sent business to rival marketplaces.
Shares of TMX Group Inc (X.TO), which operates the Toronto exchange and the small-cap TSX Venture Exchange, which was also shut down on Wednesday, were off 0.7 percent to C$24.42.
Cormark Securities analyst Jeff Fenwick, who maintains a buy recommendation on TMX with a price target of C$45.50, said the glitch made for bad headlines and brokerages lost trading commissions for the day.
But the technical problem shouldn't hurt the company in the long run, he said.
"Virtually every trading desk in Canada will once again place the bulk of their trading liquidity on the TMX exchanges once they open on Thursday," Fenwick said in a note before the market open.
Shortly after 10:50 a.m. (1550 GMT), the S&P/TSX composite index .GSPTSE was down 193.97 points, or 2.22 percent, at 8,530.14, with eight of its 10 main groups lower.
TMX said Wednesday's outage was due to a "network firmware issue resulted in complications with data sequencing," which affected the delivery of data feeds.
The energy group dropped 5.4 percent on Thursday morning and led the key index lower. Suncor Energy (SU.TO) was down 5.3 percent at C$25.30.
Oil fell below $40 a barrel as U.S. inventories of oil ballooned. [ID:nSP295792] despite record production cuts by the Organization of Petroleum Exporting Countries
Toronto's big financials group fell 1.4 percent, but Sun Life Financial (SLF.TO) rose 0.7 percent to C$24.67. Earlier, a Globe and Mail newspaper report said Sun Life is eyeing buying pieces of American International Group. [ID:nN18377224]
The materials sector fell 4 percent with Barrick Gold (ABX.TO) down 6.1 percent at C$40.17, as gold prices weakened.
"Some of (Thursday's TSX fall) is catch-up but the other part is continuing concern over where this economic landscape is going to end, or at least unfold," said Fred Ketchen, director of equity trading at ScotiaMcLeod. "It's going to be a while before confidence returns."
Telecom company BCE Inc (BCE.TO) was 3.6 percent higher at C$22.48. It said it has sued its would-be buyers in a failed C$34.8 billion takeover agreement over the break-up fee. [ID:nN17349465] ($1=$1.20 Canadian) (Reporting by Jennifer Kwan; editing by Peter Galloway)