* Bank of Canada holds rates steady as expected
* Financial stocks lead declines
* Enbridge shares fall on deal with Dominion Energy
Sept 6 (Reuters) - Canada's main stock index fell on Wednesday, dragged by financial and industrial stocks after the Bank of Canada(BoC) left its key overnight interest rate on hold, as expected, at 5.00%, but kept the doors open for further rate hikes.
At 10:21 a.m. ET (14:21 GMT), the Toronto Stock Exchange's S&P/TSX composite index was down 74.39 points, or 0.36%, at 20,339.37.
The Bank of Canada on Wednesday held interest rate steady, noting the economy had entered a period of weaker growth, but said it could raise interest rates again should inflationary pressures persist.
"Overall, while the BoC still has a bias to tighten, as long as the data remains calm and calms further, I suspect that the BoC is probably done hiking interest rates," said Douglas Porter, chief economist at BMO Capital Markets.
The central bank hiked rates by a quarter point in both June and July in a bid to tame stubbornly high inflation that has remained above the bank's 2% target for 27 months.
Canada's economy unexpectedly shrank an annualized 0.2% in the second quarter, a sign the economy could have already entered a recession. But inflation accelerated in July to 3.3% and core measures stayed at about 3.5%.
Money markets recorded a 14% chance for a hike on Wednesday. Thirty-one of 34 economists polled by Reuters between Aug. 24-30 expect no change to the central bank's overnight rate at the meeting. Heavily-weighted financials slipped 0.3%, while industrials dipped 0.2%.
In company news, both U.S. and Canadian-listed shares of Enbridge fell over 5%, after the Canadian pipeline operator said on Tuesday it will buy three utilities from Dominion Energy for $14 billion, including debt. (Reporting by Siddarth S in Bengaluru, Editing by Tasim Zahid and Shweta Agarwal)
