* TSX down 1 percent at 10,868.21
* Energy, materials shares lead TSX lower
* China stock market selloff spreads to North America
* Index ends August higher, sixth straight monthly gain (Updates closing numbers, adds details, quote)
By Ka Yan Ng
TORONTO, Aug 31 (Reuters) - Toronto’s main stock market index fell hard on Monday as oil and other key commodity prices dropped after a sharp selloff in Chinese equities undermined confidence in global economic recovery, but the index still finished August with its sixth straight monthly gain.
The price of oil fell below $70 a barrel, and that pulled the index’s big oil and gas group down 2.1 percent. The mining-heavy materials group dropped 2.22 percent.
Among heavyweight decliners were Suncor Energy (SU.TO), down 2.7 percent at C$33.49, and miner Teck Resources TCKb.TO, which sank 4.1 percent to C$26.42.
China’s key stock index .SSEC fell 6.74 percent on Monday to a three-month closing low, logging its second-biggest monthly loss in 15 years [ID:nBJD002975].
Chinese stocks have been seen as a barometer of the state of global economic recovery recently and their weakness rattled investor sentiment, knocking European and North American stock markets lower.
“Oil is taking a beating,” said Adrian Mastracci, president and portfolio manager at KCM Wealth Management Inc in Vancouver, British Columbia.
“But I think it started with China last night. It sends a bit of a signal that maybe not all is well in that part of the world.”
The S&P/TSX composite index .GSPTSE fell 109.76 points, or 1 percent, to close at 10,868.21. The index posted its sixth straight monthly gain, up 0.8 percent. It is up about 45 percent from the 2009 low it hit in March.
Nine of the index’s 10 main groups dropped. The heavyweight financials were the only sector to advance, making a late-session run to end up 0.25 percent.
The market was also pressured by a weaker-than-expected reading on Canadian gross domestic product. Canada’s economy shrank in the second quarter, but took a small step toward recovery in June. [ID:nN31431924]
$1=$1.10 Canadian Reporting by Ka Yan Ng; editing by Peter Galloway