A steep decline in oil prices help send the Toronto stock market lower Monday, despite news of big merger in the forest products sector.

Toronto’s S&P/TSX composite index lost 33.3 points to 12,945.96, also pushed lower by mining and telecom stocks.

Shares Abitibi Consolidated surged 27% on merger news.

Abitibi-Consolidated shares soared 27%, or 84¢, to $3.95 on heavy volume of 53.2 million shares after the Montreal company and U.S.-based Bowater Inc. announced plans to merge in a stock-swap deal creating a firm with annual revenues of about $9.3 billion.

Other companies in the sector enjoyed a boost in share price on speculation that there’s more to come in the days ahead. Shares in Catalyst Paper Corp. jumped 48¢ or 13.1% to $4.14 on the TSX.

The TSX mining sector was the biggest decliner, down 1.4%.

Teck Cominco Ltd. fell $1.13 to $84.56 and Aur Resources Ltd. lost $1.06 to $22.38.

Toronto energy shares fell as the March crude contract on the New York Mercantile Exchange closed down $1.41 to US$54.01 a barrel.

Suncor Energy Inc. ticked 95¢ lower to $86.90.

Gold prices also retreated. The March bullion contract on the Nymex lost $1.50 to US$643.20 an ounce, taking the TSX gold sector down 1.2%. Eldorado Gold moved 28¢ lower to $6.44.

The industrials sector was the strongest advancer. Shares in Canadian National Railway were up 53¢ to $52.36 after CAW members at the railroad ratified four-year collective agreements covering 4,000 employees in Canada.

The S&P/TSX Venture composite index moved up 3.51 points to 2,905.51.

The Canadian dollar was down 0.18 of a cent to US84.57¢.

In New York, merger and acquisition news in the United States failed to make much of impression, as investors await Wednesday’s interest rate announcement from the U.S. Federal Reserve.

The Dow Jones industrial average inched up 3.76 points to 12,490.78, the Nasdaq composite index advanced 5.6 points to 2,441.09 and the S&P 500 index points slipped 1.56 points at 1,420.62.

The Fed is expected to leave its key rate unchanged Wednesday at 5.25%.