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TSX ends down 0.1% at 29,027.73

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Industrials fall 1.1%

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Shares of MDA Space ( MDALF ) drop 25%

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Materials group adds 1.3% a gold rises

(Updates at market close)

By Fergal Smith

TORONTO, Sept 8 (Reuters) - Canada's main stock index

ended lower on Monday as the industrial and consumer staples

sectors lost ground, but the move was modest ahead of potential

U.S. and Canadian interest rate cuts this month.

The S&P/TSX composite index ended down 22.9

points, or 0.1%, at 29,027.73. It follows eight-straight days of

gains that lifted the market to a record closing high on Friday.

"September always tends to be a challenging month in terms

of seasonal volatility and the biggest factor this month is very

likely to be interest rate cuts," said Elvis Picardo, a

portfolio manager at Luft Financial, iA Private Wealth. "The

markets are anticipating rate cuts on both sides of the border."

Expectations that the Federal Reserve and the Bank of Canada

will resume their easing campaigns were given a boost on Friday

by disappointing U.S. and Canadian jobs data. Investors see a

roughly 90% chance the BoC will lower its benchmark rate from

its current setting of 2.75% on September 17.

Industrials fell 1.1%, weighed by declines for

the shares of railroad companies and MDA Space Ltd. ( MDALF ) MDA

was down 25% after the space technology firm said it received a

termination notice from EchoStar for a satellite constellation

contract.

Consumer staples also lost 1.1% but the materials

group, which includes metal mining shares, was up

1.3% as the price of gold extended its record-setting

run.

"For a while, there was a big disconnect between the price

of gold, which kept climbing to record highs and the price of

gold stocks, but lately we've seen that disconnect narrow a

little bit," Picardo said.

The bidding war for Canadian oil sands producer MEG Energy ( MEGEF )

heated up as Strathcona Resources ( STHRF ) raised its

offer, seeking to outbid larger rival Cenovus Energy ( CVE ).

Shares of MEG rose 2.4%, Strathcona was down 0.3% and Cenovus

ended nearly unchanged.