CANADA STOCKS-TSX in selloff mode as sentiment on U.S. economy sours

(Adds comment from M.Y. Capital Management, details, closing figures)

* TSX down 193.53 points, or 1.26 percent, at 15,173.94

* All 10 of the main index sectors decline

TORONTO, May 5 (Reuters) - Canada’s main stock index tracked world equity markets lower on Tuesday as investors, concerned about U.S. growth prospects, shrugged off higher crude prices and pushed the index to its biggest one-day drop in two months.

Energy stocks fell despite crude prices that hit their highest levels of 2015, and the oil and gas sector was one of the index’s biggest losers, retreating 1.3 percent.

In the group, Suncor Energy Inc lost 1.9 percent to C$38.33. Pipeline company TransCanada Corp shed 2.2 percent to finish at C$55.34.

Investors may have been positioning ahead of election results later on Tuesday in the oil-rich province of Alberta, where the left-wing New Democrats were in a position to win. Analysts have said that could have a negative impact on oil shares.

The Toronto Stock Exchange’s S&P/TSX composite index fell 193.53 points, or 1.26 percent, to 15,173.94. The index is still up some 3.7 percent this year.

All 10 of the index’s main sectors were in the red. Declining issues outnumbered advancing ones by 197 to 44, for a 4.48-to-1 ratio on the downside.

“The market’s been very volatile this year ... which means there’s some kind of downside coming up,” said Marcus Xu, president and director of portfolio manager M.Y. Capital Management Corp in Vancouver.

“Investors need to watch out for a bigger pullback this year at some point. Maybe in the magnitude of close to 10 percent.”

The U.S. and Canada both reported bigger-than-anticipated trade deficits on Tuesday, with the U.S. numbers suggesting the economy contracted in the first quarter.

“This is basically anticipation that going down the road the U.S. economy might start to slow down a little bit. The Canadian side is being dragged from that,” Xu said.

Financials, the index’s most heavily weighted sector, lost 0.9 percent. Royal Bank of Canada was down more than 1 percent to C$79.62.

“We are in a situation where the markets have had a massive rally for the last couple of years, and they are now digesting it,” said Colin Cieszynski, chief market strategist at CMC Markets.

The index’s industrials group was one of the hardest hit, down 1.9 percent. In the sector, Canadian Pacific Railway Ltd fell 3.4 percent to C$228.27, and Canadian National Railway Co was down 1.5 percent at C$78.62.

Valeant Pharmaceuticals International was the biggest drag on the index, falling 1.9 percent to C$264.60, with the overall healthcare group sliding 2.2 percent.

$1=$1.21 Canadian Additional reporting by John Tilak; Editing by Meredith Mazzilli and Peter Galloway