CANADA STOCKS-TSX ends lower for second day as oil prices fall

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TSX ends down 0.1%, at 31,843.44

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Inflation rate holds at 2.2% in November

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Energy falls 1.4% as oil settles 1.1% lower

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Financials gain 0.5%

(Updates at market close)

By Fergal Smith

Dec 15 (Reuters) - Canada's main stock index edged lower on Monday as a drop in oil prices weighed on energy shares and despite domestic inflation data that tempered expectations that the Bank of Canada would hike interest rates next year.

The S&P/TSX Composite Index ended down 43.95 points, or 0.1%, at 31,843.44, slightly extending its pullback from a record closing high on Thursday.

"We got some inflation data in Canada which I thought came in fairly tame," said Allan Small, senior investment advisor of the Allan Small Financial Group with iA Private Wealth. "I don't think the Bank of Canada is too concerned."

Canada's annual inflation rate was 2.2% in November, unchanged from the previous month and below expectations for a 2.3% rate.

Investors were pricing in about 23 basis points of tightening from the Bank of Canada next year, down from 35 basis points last Wednesday when the central bank left its benchmark rate on hold at 2.25%.

U.S. economic data can set the tone for markets in the coming days, Small said.

The U.S. nonfarm payroll figures for October and November are due later this week, along with reports on retail sales, business activity and inflation. October's jobs data was delayed by the government shutdown earlier this quarter.

The energy sector fell 1.4% as the price of oil settled 1.1% lower at $56.82 a barrel. Investors balanced disruptions linked to escalating U.S.-Venezuelan tensions with oversupply concerns.

Technology lost 0.8%, with shares of e-commerce company Shopify Inc (SHOP) down 2.6%.

Six of the 10 major sectors ended higher. That included a gain of 0.5% for financials as long-term borrowing costs fell.

Canada's 10-year yield eased 2 basis points to 3.423%.

Consumer staples was another standout, rising 0.8%. (Reporting by Fergal Smith in Toronto and Avinash P in Bengaluru; Editing by Leroy Leo and Andrea Ricci)