TORONTO (Reuters) - The Toronto Stock Exchange's main index fell broadly yesterday, led down by a drop in the energy and materials sectors, which were lower as commodity prices were hit by demand concerns.

Investor concern about the impact an economic downturn would have on oil demand helped to push the price of crude to $59.33 a barrel, while a firmer US dollar pressured gold and base metals prices.

The benchmark index's energy sector fell 4.5 percent, and the materials group dropped 4.9 percent.

Heavily-weighted stocks that helped pull the index lower included EnCana Corp, down 3.5 percent at C$56.94, Canadian Natural Resources, which sank seven percent to C$53.46, and Manulife Financial, which dropped 3.4 percent to C$25.75.

Barrick Gold Corp fell 4.9 percent to C$28.48, while Goldcorp dropped 6.3 percent to C$25.81.

"It's weaker demand anticipated from developing countries and Europe and the States, and that's going to have a negative affect on commodities in general," said Steve Ibel, institutional equities trader at Beacon Securities, in Halifax, Nova Scotia.

Teck Cominco, the most heavily-traded stock on the TSX, tumbled 20.1 percent to C$8.75 as the company — responding to an apparent market rumour — said it does not plan to issue equity to pay off debt incurred in its takeover of Fording Canadian Coal Trust.

The S&P/TSX composite index was down 264.80 points, or 2.73 percent, at 9,424.00, with all but one of its 10 main sector in negative territory. The consumer staples group eked out a 0.2 percent gain.

The slump in the energy and materials groups reversed gains made on Monday when both sectors climbed on China's plan to pump $586 billion into its economy. But the euphoria related to the China stimulus plan was short-lived as world stock markets returned to focus on economic and corporate outlook concerns.

Still, news of the stimulus plan was a source of optimism for CIBC World Markets, which suggested yesterday that battered Canadian equity markets may have reached a bottom and could get through the rest of the year without another meltdown.