* TSX finishes down 1.61 percent at 11,053.54
* Banks headline selloff, fall for third straight session
* Kinross drops on lower output forecast
* Rogers rises as BlackBerry, iPhone boost profit (Adds details)
By Ka Yan Ng
TORONTO, Oct 27 (Reuters) - Toronto's main stock index fell sharply on Tuesday, weighed down by shares of banks and insurers, which dropped for a third straight session, and by miner Kinross Gold (K.TO), which cut its production forecast.
Banking and insurance shares were the heaviest drag on the index, with all five big banks among the top decliners.
The fall was led by Royal Bank of Canada (RY.TO), which declined 3.5 percent to C$53.70, followed by Toronto-Dominion Bank (TD.TO), down 3.6 percent at C$62.17.
Kinross shares ended down 6.24 percent at C$20.30 after the company lowered its full-year 2009 production outlook and raised its estimate for average cost of sales. [ID:nN27230566]
Other gold miners joined the selloff, partly because of a bounce higher for the U.S. dollar, which tends to draw attention away from alternative investments such as gold. Goldcorp (G.TO) shares were off 2 percent at C$40.12, and Eldorado Gold (ELD.TO) fell 2.9 percent to C$11.84.
The energy group was unable to hold on to gains even as the price of oil edged above $79 a barrel. Suncor (SU.TO) fell 1.6 percent to C$37.01.
"Energy, materials, financials ... are still good areas, it's just they went up a bit too quickly," said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier. "We'll eventually come back but we need a bit of a respite."
The S&P/TSX composite index .GSPTSE finished down 181.34 points, or 1.61 percent, at 11,053.54.
Rogers Communications Inc (RCIb.TO) was one bright spot on the index, rising 5.4 percent to C$30.46 after it reported higher-than-expected quarterly results as subscribers snapped up smartphones like Research In Motion's RIM.TORIMM.O BlackBerry and Apple's (AAPL.O) iPhone despite the recession. [ID:N26193953]
Rogers' results helped push up the index's telecoms group, the only one of the index's 10 main groups to advance. Rival wireless carrier Telus (T.TO) rose 0.6 percent to C$33.05, and BCE (BCE.TO) was up 1.1 percent at C$25.60.
Investors are getting into the thick of earnings season in Canada, and the results have been mixed so far. On Tuesday, power company TransAlta (TA.TO) reported a rise in profit but forecast lower-than-expected annual cash flow. [ID:nN26140816]
TransAlta slipped 0.4 percent to C$20.97.
Canadian Pacific Railway (CP.TO) reported a smaller than expected 29 percent drop in quarterly operating earnings, but its stock fell 5 percent to C$46.32 along with other North American railroads on bleak U.S. consumer confidence data. [ID:nN26191164]
The U.S. consumer confidence report for October also weighed on market sentiment. Without sufficient consumer spending, which accounts for 70 percent of the U.S. economy, the already fragile recovery could weaken. The Conference Board's U.S. consumer confidence index fell to its lowest level since July and was well below forecasts. [ID:nN27236301]
($1=$1.07 Canadian) (Reporting by Ka Yan Ng; editing by Peter Galloway)