CANADA STOCKS-Energy drop leads TSX into red

(Adds strategist comment, updates prices to close)

* TSX fell 64.10 points, or 0.41 percent, to 15,386.77

* Nine of ten main sectors end down

TORONTO, April 16 (Reuters) - Canada’s main stock index fell on Thursday as energy bears won a scuffle in the ongoing battle against bulls who expect a recovery in crude oil prices to limit long-term damage to the country’s major oil and gas industry.

A day earlier the index hit a seven-month high, helped by a surge in the price of oil, but investors failed to muster much enthusiasm for a fresh 2015 crude price peak hit after militants took control of a Yemeni oil terminal.

In a broad but shallow decline, the Toronto Stock Exchange’s S&P/TSX composite index fell 64.10 points, or 0.41 percent, to 15,386.77.

Declining stocks outnumbered advancing ones by a more than 2-to-1 ratio, and nine of the ten main sectors fell.

“It’s an ongoing tussle between those who think the worst is over, not just in terms of the impact of crude on the energy sector, but also on the Canadian economy,” said Elvis Picardo, a strategist at Global Securities in Vancouver.

He said that Bank of Canada Governor Stephen Poloz is now involved in that debate, after this week pointing to improved economic performance in the second half of the year.

The biggest drags were Canadian Natural Resources, which lost 2.8 percent to C$40.84, and Suncor Energy Inc , which fell back 1.5 percent to C$40.07. The overall energy group retreated 1.0 percent.

Investors will be keenly awaiting first-quarter results from energy companies in coming weeks for an on-the-ground assessment of damage inflicted by the sharp decline in oil prices.

“The last week of April will be crunch time for the energy patch,” Picardo said.

The most influential gainers were Bank of Nova Scotia , which rose 0.5 percent to C$65.73, and National Bank of Canada, which advanced 1.7 percent to C$48.96.

Other major lenders also rose, with Toronto-Dominion Bank up 0.2 percent at C$56.03 and Canadian Imperial Bank of Commerce adding 0.4 percent at C$96.18.

Insurers were broadly down and the overall financials group only eked out a 0.1 percent gain.

“It’s a mild correction from yesterday, which was a big up day for energy ... Also the weekend is approaching, so people tend to be more conservative towards the end of the week,” said Douglas Davis, chief executive officer at Davis-Rea.

Additional reporting by Solarina Ho; Editing by Grant McCool and Diane Craft