Dismal economic news from Europe put Canadian investors into a nervous mood Monday, dragging the Toronto Stock Exchange lower for the day.

The S&P/TSX composite index slipped 78.92 points, or 0.9%, to finish at 8,841.48.

The dip followed news from across the ocean that the Royal Bank of Scotland may post a loss of as much as 28 billion pounds this year, driving concerns that the British government may have to take full control of the bank.

Further shaking investor nerves was news that the European Commission sharply cut its 2009 outlook for the region to a 1.9% contraction in GDP, down from previously forecast growth of 0.1%.

Energy companies led the retreat on the TSX, falling 2% on Monday.

Shares of Suncor Energy tumbled $1.20, or 4.4%, to $26.26.

Canadian Natural Resources Ltd. fell 2.4% to $47.38 and EnCana Corp. shares shed 1.7% to $55.72.

Higher for the day was ProEx Energy Ltd., up 5.6% to $11.39, and Petro-Canada, higher by 0.4% to $29.65.

Financial stocks dipped 1.7%, led by losses for each of the Big Five bank stocks.

Royal Bank of Canada shares dropped 3.1% to $32.60 and Toronto-Dominion Bank’s stock fell 3.4% to $42.22.

Bank of Montreal slipped 2.1% to $31.63 and CIBC shares were off 2.8% to $46.60.

Bank of Nova Scotia shares fell $0.59, or 1.9%, to $29.86.

Gainers included Fairfax Financial Holdings Ltd., up 2.5% to $395.00, and Sun Life Financial Corp., up 2.5% to $26.80.

Materials companies shed 1% in Monday’s trading, and the sub-gold index dipped 0.9%.

Barrick Gold Corp. retreated 2.3% to $41.74 and Goldcorp Inc. slipped 1.1% to $32.54.

Kinross Gold Corp. shares dipped 2% to $22.00.

Others advanced, including Inmet Mining Corp., up 4.6% to $21.60, and Major Drilling Group International Inc., up 4.5% to $12.70.

The S&P/TSX Venture composite index bucked the trend on Monday, rising 7.3 points, or 0.8%, to close at 872.95.

The Canadian dollar retreated by US0.43¢ to end the day at US79.70¢.

U.S. markets were closed on Monday for the Martin Luther King national holiday.

IE