The S&P/TSX composite index fell 62.10 points to close at 6228.63 on Wednesday, as every one of the TSX sub-indices lost ground.

The broad-based decline was led by a 1.52% drop in the energy group and a 1.16% slide in the influential financial services index.

Oil and gas stocks slipped despite an increase in crude oil futures. EnCana dropped 86¢ to $48.34, while Canadian Natural Resources shed $1.11 to $51.64.

Bank and insurance company stocks closed lower after David Dodge, Governor of the Bank of Canada, told an audience in London, England that Canadian interest rates must rise to keep inflation in check.

Shares in all the big banks fell. Bank of Montreal gave up $1 to $39.90, while TD shed 67¢ to $31.54. Royal Bank lost 49¢ to $55.41

Air Canada touched its 52-week low before recovering to close at $2.65, down 14¢. The airlines shares fell after Onex asked for an extra month of due diligence to look over the books of Air Canada and Aeroplan before signing off on its 35% purchase of Aeroplan.

Toronto market volume was 151.1 million shares worth $2.03 billion. Declines beat advances 689 to 387, with 227 unchanged.

Meanwhile, investors dealt with the news that eight companies are being eliminated from the S&P/TSX composite index.

Cogeco, Westport Innovations, Sleeman Breweries, Cryocath Technologies, Inex Pharmaceuticals, Pangeo Pharma, Magellan Aerospace and Crystallex International will be gone from the index effective at the close March 21. Eldorado Gold is being added.

The changes leave the successor to the TSE 300 index with 220 companies.

The junior TSX Venture Exchange lost 10.91 points at 1,061.03.

In New York, markets shrugged off the dismal performance of their European counterparts. The Dow Jones industrial average rallied toward the end of the session, finishing with a gain of 28.01 points to 7,552.07.

The Nasdaq composite index followed suit, adding 7.40 points to close at 1,278.90, while the S&P 500 was up 3.42 at 804.15.

European markets were hit by big losses Wednesday. Germany’s DAX fell 4.4%. London’s FTSE 100 dropped 4.8%, while France’s CAC 40 index lost 3.6%.

The Canadian dollar fell 0.14¢ to US67.80¢, despite Dodge’s warning that higher interest rates are on the way.