* TSX down 0.3%
* Materials and energy top losers
Jan 29 (Reuters) - Canada's main stock index fell on Monday, hurt by a sell-off in energy and material stocks, while investors grew cautious ahead of key domestic economic data and the U.S. Federal Reserve's monetary policy decision later this week.
At 10:22 a.m. ET (15:22 GMT), the Toronto Stock Exchange's S&P/TSX composite index was down 53.70 points, or 0.25%, at 21,071.58. The benchmark index is set to log its worst day in nearly two weeks.
The energy sector led the losses, falling 0.7%, and was on track to snap a five-day streak of gains, after oil prices dipped against the backdrop of Chinese demand concerns.
The materials sector, housing Canadian miners, slipped 0.5% tracking lower copper prices after a firmer dollar and China's ailing property sector sparked demand worries.
Meanwhile, investors remained cautious ahead of the Fed's decision on borrowing costs, due on Wednesday.
"There's been a lot more talk recently that the Fed could lower rates in March, around the idea that the most recent U.S. inflation data shows the six-month inflation rate is actually below 2%," said Allan Small, senior investment advisor of the Allan Small Financial Group with iA Private Wealth.
"So the Federal Reserve will consider lowering rates sometime soon."
A November reading of Canada's gross domestic product (GDP) will also be released on Wednesday that could provide some more clues on the country's economic health, and the Bank of Canada's future interest rate path.
"GDP may affect the Bank of Canada in terms of their rate-setting policy. If the number is negative, it will tell us we are in a recession. That may speed up the rate cuts here in our country", Small added.
On the corporate side, lender goeasy fell 4.3% after brokerage CIBC downgraded the company's stock to "neutral" from "outperformer". (Reporting by Khushi Singh and Purvi Agarwal in Bengaluru; Editing by Vijay Kishore)
