January 19, 2009 / 3:22 PM / in 9 years

CANADA STOCKS-TSX drops as energy, financials weigh

* Financials and energy shares lead market’s latest slide

* Key Toronto index coming off 1.8 percent fall last week

* Moves could be muted with U.S. markets shut for holiday (Adds details and comments)

TORONTO, Jan 19 (Reuters) - Toronto’s main stock index was lower on Monday morning as a drop in oil prices triggered a selloff in the energy sector, while weighty financial shares dropped on concerns about the U.S. banking sector.

The financial sector, which makes up about 33 percent of the overall TSX index, fell 1 percent to lead the slide, while the energy sector followed with a drop of 0.75 percent.

Among the key drags on the index were Royal Bank of Canada (RY.TO), down 2.5 percent at C$32.81, and Toronto-Dominion Bank (TD.TO), down 1.8 percent at C$42.90.

With nagging concerns about the U.S. banking industry showing no signs of easing, the financial sector’s latest skid followed news that Britain has launched a multi-billion-pound rescue plan for its banks. [ID:nLJ676404]

At 10:00 a.m. (1500 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was down 50.37 points, or 0.56 percent, at 8,870.03. Five of the TSX’s 10 sectors were lower.

Moves in the key index were expected to be muted as U.S. markets are closed for Martin Luther King Jr. Day.

“Obviously it’s a quiet day with New York closed,” said Bruce Latimer, trader at Dundee Securities. “But you got oil down and you got some banking issues in the United Kingdom that has spilled over into our market.”

Latimer said he expects the key Toronto index to drift throughout the session with little impetus for investors to do much of anything.

$1=$1.26 Canadian Reporting by Frank Pingue; editing by Peter Galloway

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