TORONTO (Reuters) - The Toronto Stock Exchange's main index finished lower yesterday as worries about fall-out from the US sub-prime crisis continued to shake up investors and falling oil prices dragged on energy shares.

The market pared losses late in the afternoon after falling as much as 200 points as Citigroup, the largest US bank, was unable to say that a potential $11 billion writedown for sub-prime mortgage loan losses would not get bigger.

The news fueled fears that the worst of the fallout from the credit crisis might still be to come and could depress the global economy.

The financials group, fell 0.6 percent, with Bank of Nova Scotia down 47 Canadian cents, or 0.9 percent, at C$52.15, and Royal Bank of Canada falling 73 Canadian cents, or 1.4 percent, to C$53.17.

"The concern is, does that spill beyond the financial services sector to the economy as a whole and, if that does, are stocks fully and fairly valued?" said Peter Chandler, senior vice-president at Canaccord Capital in Waterloo, Ontario.

The S&P/TSX composite index closed down 90.51 points, or 0.63 percent, at 14,273.37 with seven of the TSX's 10 main groups lower.

The market recovered some losses late in the session as CNBC repeated a statement from Goldman Sachs Group Inc that rumors of "immediate, pending writedowns" were not true.

"It's fear of unknown. How much more writedowns is there going to be in terms of sub-prime mortgages and related securities," said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.

Nakamoto added that signals from the US Federal Reserve last week that there would not be more interest rate cuts had investors worried that the Fed would not bail out the market.

Weak oil prices also dragged on the TSX as crude fell on concerns over the economic health of the United States, the world's top energy consumer.

Heavyweight energy shares fell 0.8 percent, following crude, which fell $1.95 to $93.98 a barrel.

EnCana Corp. dropped 79 Canadian cents, or 1.2 percent, to C$66.98 after it said it would buy the remaining stake in the Amoruso natural gas field in Texas from Leor Energy for $2.55bn.

Elsewhere in the sector, Suncor Energy was down C$1.35, or 1.3 percent, at C$100.15.

The materials group fell one percent as investors sensed profit-taking opportunities after the sector's recent gains and gold fell back from its 28-year high.

Gold was at $808.80 an ounce after earlier hitting a peak of $810.90.

Centerra Gold was down 32 Canadian cents, or 2.7 percent, at C$11.43 and Meridian Gold dipped 40 Canadian cents, or 1.1 percent, to C$37.78.

Miners with operations in the Democratic Republic of Congo were also hit after a report from a government-appointed panel recommended canceling several contracts.

Anvil Mining and First Quantum Minerals were both among the largest decliners by weight, falling C$1.89, or 10.8 percent, to C$15.54 and C$2.84, or 3 percent, to C$91.11, respectively.

Market volume was 342 million shares worth C$6.2bn. Decliners outpaced advancers 1,097 to 551. The blue chip S&P/TSX 60 index closed down 5.34 points, or 0.64 percent, at 828.19

South of the border, stocks were lower after Citigroup's warning prompted a sell-off in other financial shares. The Dow Jones industrial average closed down 51.70 points, or 0.38 percent, at 13,543.40 and the Nasdaq composite index fell 15.20 points, or 0.54 percent, to 2,795.18.