* TSX down 106.27 points, or 0.92 percent, at 11,427.10
* Energy shares drop 1.4 percent as oil prices slip
* Agrium falls 5.5 pct after earnings results (Updates figures, adds quote)
By Jennifer Kwan
TORONTO, Oct 23 (Reuters) - Toronto's main stock index extended its fall on Friday morning, pressured by weaker oil prices and a disappointing outlook from fertilizer maker and agricultural products retailer Agrium Inc (AGU.TO).
Big names on the downside included oil company EnCana Corp (ECA.TO), down 2.5 percent at C$63.27, and Agrium, which fell 5.5 percent to C$56.43.
Agrium said on Friday it expects third-quarter earnings to be 90 percent to 95 percent below those of the year-earlier period. [ID:nBNG237646]
Agrium's warning came a day after the world's largest potash producer, Potash Corp of Saskatchewan (POT.TO) (POT.N), reported a sharp drop in profits. [ID:nN22505738] Potash shares were down 2.5 percent at C$105.46.
"The market volatility is what it is because the recovery is fragile," said Michael Sprung, president at Sprung & Co. Investment Counsel.
Drops in Canadian National Railway (CNR.TO), down 2.4 percent at C$52.84, and Bank of Nova Scotia (BNS.TO), off 1.2 percent at C$46.29, also weighed on the index.
The index's financial group as a whole was off 1.5 percent, pulled down in part by news that Ontario, Canada's most populous province, said it would run a record budget deficit to try to help its export-oriented economy get out of recession. [ID:nN2392681]
"I think that's going to have reverberations in the financial sector," Sprung said of the Ontario budget deficit.
"The bond market might interpret that as even more debt is going to have to be put out there and interest rates are going to have to go up to compensate people to buy this debt."
At 11:12 a.m. (1512 GMT), the S&P/TSX composite index .GSPTSE was down 106.27 points, or 0.92 percent, at 11,427.10, with all of its 10 main groups lower.
Oil prices fell to around $80 a barrel, while bullion prices were also weaker. [O/R] [GOL/]
Cable and telecom company Shaw Communications Inc (SJRb.TO) posted a lower quarterly profit on Friday [ID:nN22549811]. Shares were down 2.2 percent at C$20.12.
($1=$1.05 Canadian) (Reporting by Jennifer Kwan; editing by Peter Galloway)