December 8, 2014 / 8:33 PM / in 3 years

CANADA STOCKS-TSX drops 2.5 pct in energy-led sell-off

* TSX down 341 points, or 2.36 percent, at 14,132

* All 10 main index sectors decline

* Energy shares tumble 7 percent (Adds portfolio manager comment, updates prices)

By Alastair Sharp and John Tilak

TORONTO, Dec 8 (Reuters) - Canada's main stock index slumped on Monday, at one point tracking its sharpest fall since 2011, in a broad-based sell-off led by financial and resource shares.

With world oil prices showing no signs of slowing their tumble to five-year lows, Canada's large number of energy stocks and miners were among the hardest hit. They were joined by banks, part of the single largest constituent of the index.

"This is the first time in a long while where three sectors have all gotten together and said we're going south," said John Kinsey, portfolio manager at Caldwell Securities.

The Toronto Stock Exchange's S&P/TSX composite index was down 341.71 points, or 2.36 percent, at 14,131.99 as the last hour of official trade began. At one point it fell as low as 13,983.71.

Investors worried about global economic growth: concerns fueled by weakness in China's imports and slowing export growth, and separate weak data out of Japan.

"The psychology is extremely negative. We're back into panic mode," said David Cockfield, managing director and portfolio manager at Northland Wealth Management. "The market in Canada is becoming more and more irrational."

The energy sector, which has been a casualty of the oil-markets bloodbath, gave back 6.6 percent. It has lost more than a third of its value since the middle of June.

The benchmark TSX index has shed nearly 10 percent since hitting a record high in September.

Caldwell's Kinsey said the best advice for trading on the day would be: "Keep your head down and let the shells go over your head."

He said end-of-year tax-loss selling, in which firms sell their worst-performing stocks to offset capital gains liabilities, could exacerbate selling until mid-month.

Financials lost 1.7 percent, with Toronto-Dominion Bank losing 3 percent to C$52.65 and Bank of Nova Scotia giving back 2.3 percent to C$64.65.

In the oil and gas group, Suncor Energy Inc fell 5.5 percent to C$33.77 and Canadian Natural Resources Ltd dropped 5.1 percent to C$35.25.

Among biggest mining decliners, First Quantum Minerals Ltd fell 6.6 percent to C$16.75.

Precision Drilling Corp said it expected capital spending to be lower in 2015, sending its shares down 7.3 percent to C$6.35. (Editing by Peter Galloway and Steve Orlofsky)

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