* TSX down 0.69 percent at 12,196.48
* Heavily weighted banks and energy groups fall
* S&P cuts Greek debt to junk, downgrades Portugal (Adds details)
By Ka Yan Ng
TORONTO, April 27 (Reuters) - Toronto's main stock index fell sharply on Tuesday, after credit ratings for Greece and Portugal were slashed, dragging down the risk-influenced resource and financial sectors.
In commodities, the energy sector shed 1.1 percent after oil extended early losses to near $82 a barrel, pulled lower by the nagging debt crisis concerns in Greece. The materials group fell 0.5 percent as copper, aluminum and nickel prices dropped, but gold prices firmed. [GOL/] [MET/L] [O/R]
Ratings agency Standard & Poor's downgraded Greek ratings to junk status on concerns about its ability to implement the reforms needed to address its high debt burden. [ID:nLDE63P0LU]
It also cut the rating on Portugal by two notches to A-minus, four levels above speculative, because of concerns about the country's ability to deal with high debt levels.
"This is looking like it's a little more widespread. It may not be limited to one country," said Steve Ibel, institutional equities trader at Beacon Securities, in Halifax, Nova Scotia.
Ibel said the TSX was also likely due for a pause after rising for six straight sessions.
At 12:50 p.m. (1650 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was down 84.49 points, or 0.69 percent, at 12,196.48, reclaiming some of its earlier 1 percent drop. The index seesawed through much of the morning with a mixed performance across its 10 main groups.
The S&P downgrades also put pressure on European and U.S. markets, which tumbled in reaction to signs that the Greek debt crisis was spreading to other highly indebted states on the periphery of the euro zone.
Other key decliners in Toronto included miner Teck Resources TCKb.TO, down 4.6 percent at C$41.24, and fertilizer producer Agrium Inc (AGU.TO), down 1.21 percent at C$61.40.
Nexen Inc NXY.TO fell 2.42 percent to C$25.86 with the broad market decline, after reporting a 37 percent rise in first-quarter profit and increasing production at its Long Lake oil sands project. [ID:nN27241352]
$1=$1.01 Canadian Reporting by Ka Yan Ng; editing by Rob Wilson