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* TSX down 53.80 points, or 0.35 percent, at 15,158.95
* Nine of 10 main index sectors advance
By Andrea Hopkins
TORONTO, Feb 20 (Reuters) - Canada's main stock index slipped on Friday as grim domestic economic news and prospects for another interest rate cut weighed on financials, offsetting strength in gold stocks and a surge in drugmaker Valeant as it closes in on a deal to buy Salix.
Retail sales fell by the most in four years in December, data showed, with subdued holiday shopping and cheaper oil accounting for the surprise 2 percent drop.
Bets that the Bank of Canada will cut rates at its March 4 meeting have increased as signs of economic weakness multiply.
The heavyweight financial sector fell 1.2 percent, with Royal Bank of Canada down 1.7 percent to C$75.92 and Toronto-Dominion Bank shedding 1.3 percent to C$53.75.
Elsewhere, investors remained focused on a possible agreement between international lenders on Greece's proposal for extending its loan agreement.
"The backdrop is the Greek exit - the Grexit - that's going to dominate news over the next few days until this game of chicken resolves itself," said John Ing, president of Maison Placements Canada.
The Toronto Stock Exchange's S&P/TSX composite index was down 20.04 points, or 0.13 percent, at 15,160.29. Seven of the 10 main sectors on the index were higher.
Shares of transportation company Bombardier Inc slipped 2.5 percent to C$2.39, and Fairfax Financial Holdings Ltd fell 4.7 percent to C$657.50 after each said it was issuing new equity.
Barrick Gold Corp stock gained 1.5 percent to C$16.27 after the company's chairman on Thursday outlined a leaner strategy. Fellow gold miner Goldcorp Inc added 2.4 percent to C$27.29.
Shares of Valeant Pharmaceuticals International Inc rose 2.6 percent to C$216.42 on news it was close to a deal to acquire bowel drug maker Salix Pharmaceuticals Ltd for about $160 per share, according to a person directly familiar with the matter. (Reporting by Andrea Hopkins and Alastair Sharp)