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TSX down 1.6%

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Index hits lowest since late June

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Healthcare, materials lead broad declines

(Updated at 9:50 a.m. ET/ 1350GMT)

By Purvi Agarwal

Aug 6 (Reuters) - Canada's main stock index hit over a

month low on Tuesday with mining and healthcare stocks leading

broader declines as investors caught up to Monday's global

stocks rout after a Canadian market holiday.

At 9:50 a.m. ET (13:50 GMT), the Toronto Stock Exchange's

S&P/TSX composite index was down 351.32 points, or

1.58%, at 21,876.31, after logging its worst day since February

on Friday.

Investors in Canada caught up with a global stocks rout from

Monday, where markets saw a heavy sell-off following fears of

recession in the United States.

"Canadian stocks didn't go down yesterday because the market

was closed, now they're catching up. There'll be a big gap down

this morning to adjust for that," said Colin Cieszynski, chief

market strategist at SIA Wealth Management.

Despite data showing a rebound in U.S. services activity and

some positive comments from Federal Reserve policymakers on

Monday, uncertainty from the sell-off weighed on the sentiment.

Furthermore, the yield on the two-year Canadian government

bond inched up after six sessions of decline, while

the one on the five-year snapped a nine-session

losing streak.

The materials sector that houses Canadian miners

and fertilizer companies was trading at its lowest in over a

month with a 3.4% fall. It was pulled down by miners tracking

steep losses in copper prices.

Healthcare shares was also among the top losers

with a 3.5% decline, with all sectoral indexes trading in the

red except communication services that gained 0.1%.

"We have the impact of commodity trading (also) today. It's

likely to be a volatile day for Canada," Cieszynski added.

Data-wise, domestic employment figures are due on Friday

that will shed more light on the country's labour market.

Attention will also be on a host of Fed policymakers

scheduled to speak throughout the month, against the backdrop of

recession fears.

Back home, oil producer Suncor Energy ( SU ) is expected to

report its quarterly earnings after the closing bell.