* TSX ends down 130.61 points, or 1.1 pct, to 12,230.59 * Nine of 10 sectors lower, led by energy shares * Materials rise 0.2 percent * Agrium drops nearly 11 percent By Claire Sibonney and John Tilak TORONTO, Nov 7 Canadian shares marked their steepest one-day drop in more than two weeks on Wednesday as the market worried about the huge economic challenges and looming fiscal showdown facing newly re-elected U.S. President Barack Obama. While Obama promised to reach across the aisle to address these issues, investors were skeptical of a speedy resolution on the "fiscal cliff" - a mix of tax increases and spending cuts due to extract some $600 billion from the U.S. economy at the beginning of 2013 barring a deal. Neither the election result, nor the partisan gridlock that Obama faces come as a surprise to markets, which already appeared to be pricing in a Democratic victory on Tuesday. "It was more of a buy the rumor, sell the news type of situation in terms of the election. Market performance clearly dictated that Obama was going to be reelected and I think we as investors give politicians way too much credit," said Brian Belski, chief investment strategist at BMO Capital Markets. "For Obama to be pushed out of office the cycle had to be much more definitely negative and it wasn't, with U.S. stocks up 14 percent year to date as of yesterday," said Belski. Leading the decline was the energy subgroup, which fell 2.2 percent on a day when oil prices were down about 4 percent. Suncor Energy Inc fell 2.7 percent to C$33.67 and Canadian Natural Resources Ltd was down 4.1 percent at C$28.95. Though the United States could eventually approve TransCanada Corp's Keystone pipeline, having the Democrats in power may push it further into the future. TransCanada shares were down 2.1 percent to C$44.53. The Toronto Stock Exchange's S&P/TSX composite index ended down 130.61 points, or 1.1 percent, to 12,230.59. The index hit an intraday low of 12,201.87, marking its biggest one-day drop since Oct. 23. Nine of the 10 main groups were down. Materials, home to gold miners, edged up 0.2 percent. BMO's end-of-year target for the TSX is 12,200, leading Belski to believe the market was already getting ahead of itself. Weighing on broader sentiment, European Central Bank President Mario Draghi underscored the weakness in Europe's economy. Traders were also anxious about a vote in Greece's parliament later on Wednesday on an austerity package needed to secure a fresh injection of international aid and avert bankruptcy, which would rock the euro zone and world markets. "Now that the distraction of the U.S. elections is over, investors are again focusing on the two biggest threats to global growth - the U.S. fiscal cliff and the euro zone situation," said Elvis Picardo, strategist and vice president of research at Global Securities. Some Canadian earnings reports also dampened the mood. Of the 38 percent of TSX companies who have so far reported third quarter results, 52 percent have met or beat expectations while 48 percent have missed, according to Thomson Reuters StarMine data. One of the heaviest decliners on the index was fertilizer producer Agrium Inc, down nearly 11 percent at C$95.03, after it reported lower quarterly profit due to downtime at its potash mine and dragged-out contract talks with China and India. Bombardier Inc dropped 4.4 percent to C$3.45 after it said it would delay by about six months the first flight of its C-Series jetliner because of issues related to suppliers, and that it would cut about 1,200 jobs in its train manufacturing division. Enbridge Inc was down 1.8 percent at C$39.39. Canada's second-largest pipeline company reported a third-quarter profit as losses on financial derivatives fell and it carried more oil and natural gas on some of its pipelines. Home-improvement retailer and distributor Rona Inc slipped 3.3 percent to C$9.82. It posted a drop in quarterly profit after cutting prices to limit sales declines in a tough market. Gold companies were one of the few bright spots on the index. Franco-Nevada Corp was up 5.2 percent at C$58.97 after the gold-focused royalty company said on Tuesday it would buy an 11.7 percent net royalty interest in an oil field in Saskatchewan from Penn West Petroleum Ltd for C$400 million in cash. Also the upside, Intact Financial Corp was up 4.1 percent to C$63.10 after its quarterly results topped estimates. WestJet Airlines Ltd rose 0.6 percent to C$18.07 after beating forecasts and moving closer to starting up its regional carrier by naming a boss for the unit.