*TSX down 14.26 points, or 0.1 percent, to 12,190.60
*Five of index's 10 main sectors lower (Updates to close)
By Claire Sibonney
TORONTO, Sept 27 (Reuters) - Toronto's main stock index slipped lower at the close on Monday following a muted day of trading as weak financials and gold miners undermined strength in energy issues and base metal miners.
Hitting financials, which were off 0.6 percent, were renewed worries about euro-zone debt after credit agency Moody's slashed its rating on some of Anglo Irish Bank's [ID:nLDE68Q15A] lower-grade debt.
Royal Bank of Canada (RY.TO) fell 0.8 percent to C$53.04, and Toronto-Dominion Bank (TD.TO) dropped 0.8 percent to C$73.85.
Gold mining shares were down 0.7 percent even though the price of gold hit a record high of $1,300 an ounce, extending a record-breaking two-week rally on concerns about the health of the economic recovery. [GOL/]
Barrick Gold (ABX.TO), the world's No. 1 producer, slipped nearly 1 percent to C$47.00, despite remarks by its chief executive that gold prices could easily outperform recent record highs to rise above $1,500 an ounce in the next year. [ID:nLDE68Q0ZY]
"We're just taking a breather from last week's move," said Youssef Zohny, associate portfolio manager at Van Arbor Asset Management in Vancouver, referring to recent strength in gold miners and a remarkably strong September for the market overall. In the past, September has often been a month marked by stock market pullbacks.
Bullion's rally accelerated last week after the U.S. Federal Reserve signaled its readiness to pump billions of dollars into the economy through purchases of government debt, a process known as quantitative easing. [ID:nN20109053]
"That essentially increases the money supply and that would be viewed as not only potentially inflationary down the road, but more importantly towards a weakness in the U.S. dollar," Zohny said.
Gold has been bought as a safe-haven alternative to the U.S. dollar.
Rising index groups included energy, up 0.4 percent, and base-metal miners, which climbed 1 percent even though some underlying commodity prices slipped. [O/R] [MET/L]
Oil company Canadian Natural Resources (CNQ.TO) rose almost 1 percent to C$34.23, while miner Teck Resources TCKb.TO jumped almost 2 percent at C$41.15.
"In terms of energy and basic materials, we're getting some key economic data this week, mainly China and U.S. manufacturing data, which last month surprised to the upside," Zohny said.
"I think we're seeing a little bit of optimism towards that."
The S&P/TSX composite index .GSPTSE closed down 14.26 points, or 0.12 percent, at 12,190.60, with five of its 10 main sectors lower.
Takeover target Potash Corp (POT.TO), up 0.7 percent at C$150.46, remained in the spotlight. A U.S. federal judge said he would allow the discovery process to proceed in a lawsuit filed by the world's largest fertilizer maker to fend off BHP Billiton's (BHP.AX) $39 billion hostile takeover bid. [ID:nN27253534]
BlackBerry maker Research In Motion RIM.TO shed 0.9 percent to C$49.67 ahead of its launch of its PlayBook tablet after the market close. [ID:nN27103898]
Bank of Nova Scotia (BNS.TO) was down 0.5 percent at C$53.56 after announcing it is acquiring Royal Bank of Scotland's (RBS.L) Chilean wholesale banking operations, extending its already substantial Latin American presence. [ID:nN27258221]
($1=$1.03 Canadian) (Editing by Peter Galloway)