June 15, 2009 / 8:27 PM / 10 years ago

CANADA STOCKS-TSX's recent gains unravel as energy shares drag

* TSX falls 250.18 points to 10,394.78

* Slide follows four weeks of gains

* Energy shares fall 3.4 pct, lead selloff (Adds details, official numbers and comments)

By Frank Pingue

TORONTO, June 15 (Reuters) - Toronto’s main stock index closed lower on Monday as falling commodity prices sent the resource-heavy index into a broad-based retreat that nearly wiped out the gains made over the past two weeks.

The weighty energy sector suffered the biggest selloff with a 3.4 percent drop in the face of oil prices that fell nearly 2 percent after nearing an eight-month high last week.

Shares of Suncor Energy (SU.TO) finished down 4 percent at C$37.47, while Canadian Natural Resources (CNQ.TO) shares followed with a slide of 3.6 percent to C$62.40.

The lower start to the week follows four straight weekly gains for the TSX and erased most of the 2.6 percent gain logged over the past two weeks.

Prices for oil and gold, both key Canadian exports, were dealt a blow by a U.S. dollar, which rallied after Russia expressed confidence in the greenback as the world’s reserve. [ID:nN15224944]

“Obviously that strength in the U.S. dollar means all your commodities measured in U.S. dollars are weaker and that just creates selling on its own,” said Sal Masionis, stockbroker at Brant Securities.

“But the market was ready for some correction because it’s had a huge move up from its bottom, so we just got into a bit of a correction phase here.”

Last week the TSX was 43 percent above the five-year low of 7,479.96 it hit in March. But after a pair of lower closes it is now up 39 percent from that low.

The S&P/TSX composite index .GSPTSE ended down 250.18 points, or 2.35 percent, at 10,394.18. (Reporting by Frank Pingue; editing by Frank McGurty)

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