* TSX falls 267.45 pts, or 2.1 pct, at 12,252.06
* Higher U.S. dollar drags down commodities
* Copper, gold, oil prices slide more than 1 pct
* Miners, energy firms sink
* TSX still up 5.4 pct on month (Adds details, analyst comments)
By Jon Cook
TORONTO, Oct 31 (Reuters) - Canadian stocks got spooked on Monday, falling more than 2 percent, with sliding commodities, Japanese market intervention, the failure of a major brokerage and Europe's lingering crisis all making investors jittery.
A surprise move by Japan to weaken its currency by buying U.S. dollars, caught the market off guard and had a negative trickle-down effect on equities, commodities and other risky assets. [MKTS/GLOB]
"We did not expect to wake up to see the Japanese buying currency," said Brendan Caldwell, chief executive of Caldwell Investment Management Ltd. "At the moment of actual crisis, there is no substitute for the U.S. dollar, nor will there likely be for the foreseeable future."
Adding to the market's worries, U.S. futures broker MF Global filed for bankruptcy on Monday. For details see [nN1E79U0DF]
Renewed doubts about the euro zone's debt crisis plan also helped put an abrupt end to October's stock market rally.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE, dropped 267.45 points, or 2.1 percent, at 12,252.06. It was the TSX's worst daily decline in nearly a month.
Still, the index finished October up 5.4 percent, its biggest one-month gain since May, 2009.
Nine of the Canadian market's 10 main sectors were lower, led by a 3.41 percent drop in energy stocks, which fell as oil prices slipped in low-volume trading. [O/R]
The Potash Corp (POT.TO) was the biggest laggard, falling 5.1 percent to C$47.18. Potash and other mining stocks pulled the heavily weighted materials sector down 3.1 percent.
"They all seem to move in a pack and today the pack is going south," said David Baskin, portfolio manager and president of Baskin Financial Services.
First Quantum Minerals (FM.TO), down 6.1 percent to C$20.91, was another big drag.
Base metals such as copper slipped as the dollar rose and enthusiasm for Europe's debt deal gave way to the view that the region's economic problems are far from over. [MET/L]
Barrick Gold (ABX.TO), down 2.6 percent to C$49.21, was also a big weight. Fresh on the heels of its best weekly performance in a month, gold fell more than 2 percent as a spike in the U.S. dollar spooked precious metals investors. [GOL/]
Canadian banking shares were also hurt by "lack of details coming out of Europe on how they're going to execute this plan," Baskin said.
Canadian financial stocks were down 1.4 percent. Royal Bank of Canada (RY.TO) led the sector down, falling 2.1 percent to C$48.62. Insurer Manulife Financial (MFC.TO) also dropped 3.8 percent to C$13.16.
Telecom stocks, a traditional safe-haven play, were up 0.5 percent. Bell Aliant BA.TO gained 1.1 percent to C$28.06, BCE Inc (BCE.TO) rose 0.7 percent to C$39.51, and Rogers Communications (RCIb.TO) gained 0.3 percent to C$36.35.
In other company news, Grande Cache Coal GCE.TO shares jumped 68 percent after it agreed to be acquired by Winsway Coking Coal and Marubeni Corp in a C$1 billion ($1 billion) deal fueled by demand from China's steelmakers. [ID:nN1E79U0DM]
TMX Group (X.TO) shares rose more than 3 percent after the operator of Canada's largest stock market threw its support behind a C$3.8 billion takeover offer from a group of banks and pension funds. [ID:nL4E7LV0LA]
Pacific Northern Gas Ltd PNG.TO shares spiked more than 20 percent after it agreed to bought by AltaGas Ltd (ALA.TO) for about C$145 million. [ID:nL4E7LV20K]
$1=$1,00 Canadian Editing by Jeffrey Hodgson