TORONTO (Reuters) - Toronto's main stock index fell yesterday on persistent fears that austerity measures in Europe could stifle global growth, as Germany said it would restrict short-selling linked to euro zone debt.

Ongoing worries about euro zone debt and the impact on economic growth kept some commodity prices lower, sending the TSX's energy and materials sectors down 0.7 percent and 0.5 percent, respectively.

Imperial Oil sank 1.7 percent to C$40.45, Husky Energy fell 0.2 percent to C$26.98 and Canadian Natural Resources was down 0.8 percent at C$70.78. Gold miner Kinross Gold was lower by one percent at C$18.82.

Investor sentiment was also hit by worries about a US clampdown on financial regulation.

In Washington, several Republicans will vote with Democrats to wrap up debate on the sweeping reform of financial regulations and move toward final passage, Senate Majority Leader Harry Reid said. Separately, Germany said it will ban "naked" short-selling from midnight in shares of the country's 10 most important financial institutions. In naked short-selling, a trader sells a financial instrument short, betting that it will fall, without first borrowing the instrument or ensuring that it can be borrowed, as would be done in conventional short-selling.

"It would simply limit the ability for a lot of US investment banks to trade in these markets," said Jean-Francois Dion, vice-president and portfolio advisor, Canadian equities, at RBC Dominion Securities.

"I would say it adds a layer of short-term uncertainty in terms of what other restrictions might be announced down the road, and how investors and banks might have to react to these rules."

The Toronto Stock Exchange's S&P/TSX composite index finished the day down 48.49 points, or 0.41 percent, at 11,764.51, with seven of its 10 main sectors lower. Earlier, the TSX climbed one percent.

The euro plummeted to a four-year low against the US dollar.