June 16, 2009 / 5:35 PM / 10 years ago

CANADA STOCKS-TSX knocked lower by energy shares

* TSX down 39.28 points at 10,355.50

* Erases earlier 166-point gain

* Energy shares lead turnaround (Adds details and comments)

By Frank Pingue

TORONTO, June 16 (Reuters) - Toronto’s main stock index slid lower on Tuesday afternoon, relinquishing a meaty gain from early in the session, as oil prices backed off their highs and weighed on the influential energy sector.

The move lower came alongside a retreat in U.S. equities as investors worried that the economic recovery’s pace might not be as strong as initially hoped.

Shares of EnCana Corp (ECA.TO), North America’s largest natural gas producer, were the biggest drag on the index, falling 2.2 percent to C$59.01. Suncor Energy (SU.TO) sagged 2.2 percent to C$36.62. The broader energy index was down 1.66 percent.

“The market was strong out of the gate this morning and there was no follow-though and it just began to drift, and when there was even less follow-through it went negative,” said Bruce Latimer, a trader at Dundee Securities.

“We just have a bit of a consolidation going on of the run-up of the last few weeks. But I’m not really too worried since Toronto just hit a new high last week, so to see it pull back here is normal.”

Last Thursday, the TSX rallied to 10,726.01, which put it 43 percent above the five-year low it reached in March. It has closed down in every session since.

At 1:20 p.m. (1720 GMT), the S&P/TSX composite index .GSPTSE was down 39.28 points, or 0.38 percent, at 10,355.50. Earlier, the index jumped 166 points, or 1.6 percent, as commodity prices climbed against a weaker U.S. dollar.

$1=$1.14 Canadian Reporting by Frank Pingue; editing by Rob Wilson

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