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TSX ends down 1.69 points at 23,040.76

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Energy falls 1.7%; oil settles 1.6% lower

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BoC cuts key rate by 25 basis points

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Real estate climbs 1.3%

(Updates at market close)

By Nikhil Sharma and Fergal Smith

Sept 4 (Reuters) - Canada's main stock index ended

slightly lower on Wednesday, adding to the previous day's sharp

decline, as losses for the energy sector offset gains for

interest rate-sensitive stocks after the Bank of Canada cut

rates.

The Toronto Stock Exchange's S&P/TSX composite index

ended down 1.69 points, or 0.01%, at 23,040.76.

On Tuesday, the index posted its biggest decline in one

month as recent signs of slower economic growth spooked

investors globally.

The Bank of Canada lowered its key interest rate by 25 basis

points to 4.25% as forecast on Wednesday and Governor Tiff

Macklem, citing weak growth, said a larger cut could be in order

if the economy needs a boost.

This process of lowering rates is not over, said Brian

Madden, chief investment officer at First Avenue Investment

Counsel, adding that the central bank is "very mindful that

weakness is starting to emerge in the labor market."

High dividend paying stocks could particularly benefit from

interest rate cuts, say analysts.

They were among the biggest gainers, with the real estate

sector advancing 1.3%, utilities rising

0.7% and communication services ending 0.8% higher.

Air Canada ( ACDVF ) has offered its pilots a 30% pay hike in

an effort to avert strike action, Bloomberg News reported,

citing people familiar with the matter. The company's shares

were up nearly 1%.

In contrast, the energy sector fell 1.8% as

lackluster data from the United States and China raised

expectations of reduced demand for oil. U.S. crude oil futures

settled 1.6% lower at $69.20 a barrel.

The materials group, which includes metal miners

and fertilizer companies, also lost ground, falling 0.6%.

Canadian Prime Minister Justin Trudeau dismissed talk of

early elections, vowing to continue governing, after the small

political party helping keep his minority Liberal government in

power withdrew its automatic support.