* TSX down 52.97 points, or 0.41 percent, at 12,720.15 * TransCanada gains after environment report backs Keystone * Gloomy global outlook hurts resource companies, banks By Alastair Sharp TORONTO, March 4 Canada's main stock index fell on Monday, hurt by slips in heavyweight banking and mining stocks as global economic worries returned to the fore, while TransCanada Corp rose after a positive environmental report about a contentious pipeline project. Political stalemate in Italy and China's plans for tighter controls on its property sector added to concern about slower global growth, which in turn hurt Canada's resource-rich index. "We're back to the worries about the international economic situation, it started with the Italian election and then the economic numbers coming out of Germany and China," said John Kinsey, a portfolio manager at Caldwell Securities. "Europe and China still seem quite sluggish, as does Japan." At mid-morning the Toronto Stock Exchange's S&P/TSX composite index was down 52.97 points, or 0.41 percent, at 12,720.15. Offsetting the broad losses -- seven of ten main sectors were trading in the red -- was leading pipeline company TransCanada, after a U.S. government report said its contentious Keystone XL pipeline project would not increase development of Canada's oil sands. Its shares last traded up 0.7 percent at C$48.14, giving it the most positive effect on the index. Weak heavy oil prices, largely due to limited pipeline capacity to ship surging supplies from the Alberta oil sands to export markets, and long-depressed natural gas markets have combined to hamper energy-producer stocks in Canada. "It's something that's badly needed and it would be a plus if indeed it does go through," Kinsey said. A final U.S. decision on approving or rejecting Keystone is expected by August. The release of the report failed to boost other stocks that would likely gain from the pipeline, with Canadian Natural Resources Ltd, the country's largest independent oil explorer and producer, falling 1.9 percent to C$31.43 and Cenovus Energy Inc off 1.8 percent at C$32.15. Royal Bank of Canada slipped 0.5 percent to C$63.46, after beating earnings expectations last week. Bank of Nova Scotia, which reports on Tuesday, dipped 0.5 percent to C$60.83.
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