June 12 (Reuters) - Canada's main stock index fell on Wednesday as crude prices dropped more than 2% on a weaker outlook for demand and a rise in U.S. crude inventories.
The energy sector dropped 1.2%, the biggest percentage decliner, weighed down by losses in Encana Corp and Nuvista Energy.
* Escalating trade tensions between the world's largest economies also hurt sentiment, with U.S. President Donald Trump saying that he was holding up a trade deal with China and had no interest in moving ahead unless Beijing agrees to four or five major points.
* Hopes that the U.S. Federal Reserve would take action to counter a slowdown triggered by the trade war have helped Canada's main index rise 1% in June.
* Canada runs a current account deficit and exports many commodities, including oil, so its economy could be hit by a slowdown in the global flow of trade or capital.
* At 9:50 a.m. ET (13:50 GMT), the Toronto Stock Exchange's S&P/TSX composite index was down 25.54 points, or 0.16%, at 16,223.22.
* The materials sector, which includes precious and base metals miners and fertilizer companies, added 0.2% as prices of safe-haven bet gold rose on heightening trade tensions.
* On the TSX, 117 issues were higher, while 114 issues declined for a 1.03-to-1 ratio favoring gainers, with 18.98 million shares traded.
* The largest percentage gainer on the TSX was Cascades Inc , which jumped 8.1% after TD Securities upgraded its to "buy" from "hold".
* West Fraser Timber Co rose 3.1%, among the top gainers.
* Oil producer Encana Corp fell 3.2%, the most on the TSX, while the second biggest decliner was First Quantum Minerals, down 3.2%.
* The most heavily traded shares by volume were Stornoway Diamond Corp, Prometic Life Sciences Inc and Encana.
* The TSX posted one new 52-week high and six new lows.
* Across all Canadian issues, there were five new 52-week highs and 21 new lows, with total volume of 30.76 million shares. (Reporting by Amy Caren Daniel in Bengaluru; Editing by Sriraj Kalluvila)