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* TSX tumbles to lowest level since Oct 03
* Selloff follows 1 percent rally at open
* Data, commodities and U.S. banks blamed for skid (Adds details and comments. Updates numbers)
By Frank Pingue
TORONTO, Feb 23 (Reuters) - Toronto's main stock index fell nearly 4 percent to its lowest closing level in more than five years on Monday, hit by lower commodity prices, weak economic data and nagging concerns about U.S. banks.
All of the TSX's 10 sectors finished lower in a decline headlined by a 5 percent drop in the big energy sector as persistent fears of a prolonged global slowdown weighed on oil prices.
The slide in oil prices followed weak Canadian retail sales data for December that puts pressure on the Bank of Canada to cut interest rates at its next policy announcement date on March 3.
"While it's not a significant data point in and of itself, it just confirms what many investors have been fearing, that this recession is much deeper and much longer than what we had believed a few months ago," said Elvis Picardo, analyst and strategist at Global Securities in Vancouver.
"You also had U.S. indices like the Dow Jones and S&P 500 trading at their lowest levels in over 10 years and that is another factor that really depresses sentiment."
Lingering uncertainty about the U.S. government actions to shore up beleaguered banks banks rattled equities in the United States and the selling spilled over into Canada.
The S&P/TSX composite index .GSPTSE closed down 302.32 points, or 3.8 percent, at 7,647.67. The index had risen 1 percent just after the open.
$1=$1.25 Canadian Editing by Peter Galloway