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TORONTO (Reuters) - Toronto's main stock index closed lower on Wednesday as a slide in oil prices shook the weighty energy sector while disappointing debt auctions rattled U.S. stocks and hurt sentiment in Canada.
Oil prices fell after U.S. data showed crude stocks were at their highest levels since 1993, which sparked a selloff in energy issues, which make up about 22 percent of the Toronto Stock Exchange's main index.
Shares of EnCana Corp fell 2.5 percent to close at C$53.12, while Nexen Inc shares tumbled 4 percent to end the session at C$20.41.
Also weighing on investor sentiment was a debt auction that showed weak demand for the U.S. Treasury's five-year notes. Britain saw its first failed government debt auction since 2002.
"The markets came out of the gate a little strong and when there was no follow through in the morning, that coupled with weak treasury auctions and people started to take profits," said Bruce Latimer, a trader at Dundee Securities.
"But after the move on Monday we are still up on the week so it's just a bit of a consolidation period, and so I am not really too concerned about it."
The S&P/TSX composite index ended down 51.95 points, or 0.59 percent, at 8,797.44, off a session high that had the index up 1.5 percent about one hour after the open.
The TSX has fallen in the past two sessions but remains up 3.4 percent on the week thanks to a massive 5.3 percent gain on Monday when investors cheered a U.S. government plan to rid banks of toxic assets.
Latimer said another possible drag on the TSX in the latest session was the nearing of the month end, when investors tend to rebalance their portfolios.
Six of the 10 TSX sectors ended lower on Wednesday, with the financials index off 1.64 percent, while the energy sector was down 1.1 percent.
Shares of banks and insurers continued to weaken after a lengthy and meaty string of gains that left them ripe for investors to pocket gains.
Manulife Financial fell 3.6 percent to C$14.88, while Bank of Nova Scotia eased 2.3 percent to C$31.68.
The main drag on the index came from shares of BlackBerry maker Research In Motion, which fell 4.4 percent to C$52.39 after J.P. Morgan Securities started coverage of the company with an "underweight" rating and said it is already operating close to its peak earnings power.
The broader TSX composite is up 8.3 percent in March with just four sessions remaining in the month, which some experts feel is enough of a cushion to help the index record its first monthly gain since August.
"Month end is around the corner and if we can close where we are now, or close to where we are, it will be the first up month in quite some time," said Latimer.
"I don't see anything standing in the way of that, but that can change."
Editing by Rob Wilson