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* TSX down 161.53 points, or 1.21 pct, at 13,210.17
* All 10 of the index's main groups lower
* Italy's debt ratio sparks euro zone contagion fears
By Solarina Ho
TORONTO, July 11 (Reuters) - Toronto's main stock index fell more than 1 percent on Monday morning in a broad-based retreat led by energy issues, battered by fears the euro zone debt crisis could widen and by weaker oil prices.
Oil and gas companies slumped 2.11 percent, with Canadian Natural Resources (CNQ.TO) the index's most influential decliner, down 2.82 percent at C$39.22. Suncor Energy (SU.TO) followed with a 1.96 percent drop to C$38.52, while Talisman Energy TLM.TO rounded up the top three heaviest decliners with a 4.34 percent tumble to C$18.54.
Energy firms, which make up roughly a quarter the market's index, were hit by cooling oil prices, which fell on fears that the European debt crisis could spread to other euro zone countries and by a drop in Chinese crude imports. [O/R]
At 10:47, the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was down 161.53 points, or 1.21 pct, at 13,210.17. All 10 of its main groups were lower.
The slide followed a decline on global markets, which tumbled on worries that Italy -- the euro zone's third-largest economy -- could be the next casualty of the region's debt crisis. Italy has the euro zone's highest sovereign debt ratio relative to its economy, after Greece. [MKTS/GLOB]
A weaker than expected U.S. jobs report on Friday and data showing China's import growth fell to its slowest pace in 20 months also encouraged investors to sell riskier assets.
"A lot of pressure on the markets: Friday saw a really lousy jobs number and we didn't get any satisfaction over the weekend with issues in Europe, nor with the (U.S.) debt ceiling. So those are not promising things to start the week off with," said Barry Schwartz, vice-president and portfolio manager at Baskin Financial Services.
Schwartz added that second-quarter earnings from the United States could provide further direction later in the week, but expected global issues would remain dominant.
"I think that's (earnings) put to the sidelines though, and people are focusing on these macro issues ... So I would expect markets to stay skittish throughout the whole summer. Investors have to live with the volatility," Schwartz said.
The economically sensitive financials group was down 1.07 percent, with Manulife Financial (MFC.TO) leading the slide. The insurer retreated 2.61 percent to C$16.43. Toronto-Dominion Bank (TD.TO) was not far behind, falling 1.36 percent, to C$79.28.
The influential materials sector, home to mining firms, gave back 1.61 percent. Potash Corp (POT.TO) was down 2.11 percent at C$55.69 while diversified miner Teck Resources TCKb.TO retreated 3.03 percent to C$48.63.
($1=$0.97 Canadian) (Editing by Rob Wilson)