TORONTO (Reuters) - The Toronto Stock Exchange's main index slipped lower yesterday as a strong showing from financials was offset by resource shares that were hit by another sharp drop in oil prices.

Oil fell by $5.31 to below $129.29 a barrel amid worries over dampening demand in the US, as well as easing tensions between Iran and the West.

The drop in oil - which is still up nearly 30 percent for the year - battered Bay Street's heavyweight energy group, sending it down 3.2 percent.

"It's apparent that the US is really responding pretty negatively to what's going on," said Brian Pow, vice-president of research and equity analyst at Acumen Capital Partners in Calgary, referring to the still-high energy prices.

"People are really tightening their belts."

Nexen Inc. slumped after the oil producer posted a disappointing quarterly profit, as one-time charges and trading losses nearly wiped out its gains from record high oil prices. Nexen's shares closed down C$4.01, or 10.9 percent, at C$32.95.

The S&P/TSX composite index closed down 43.55 points, or 0.32 percent, at 13,460.25, with just three of its 10 main sectors in the negative.

Also in he energy group, Canadian Natural Resources fell C$3.01, or 3.4 percent, to C$86.64, while Suncor Energy slid C$2.10, or 3.7 percent, to C$54.50.

The materials sector fell 2.8 percent, while its gold producers were trimmed by the lower price of bullion, which followed oil's descent.

The lion's share of the losses came from the two resource sectors, with energy producers, miners and fertiliser firms among the biggest laggards by weight.

Agnico-Eagle Mines was down C$2.95, or four percent, at C$70.28, while fertiliser company Potash Corp of Saskatchewan lost C$8.75, or 3.9 percent, to C$215.31.

The financial sector led the upside, as it took heart from stronger than expected results from US banks.

Canadian Imperial Bank of Commerce rose C$3.91, or 7.4 percent, to C$57.10, and Bank of Montreal was up C$3.05, or 7.3 percent, at C$44.98, while the sector overall climbed 3.3 percent.