Canada's resource-heavy main stock index was set to open lower on Monday, dragged down by falling commodity prices as the initial enthusiasm over a European Union deal to tackle its debt crisis faded.

FACTORS TO WATCH

* Canadian equity futures pointed to a lower open.

* U.S. stock index futures fell on lingering concerns a deal over economic integration in Europe will not be enough to keep the region's two-year sovereign debt crisis from spreading further. <.N>

* European shares remained lower around midday, although earlier losses were trimmed in thin trade, led by banks and insurers. <.EU>

COMMODITY PRICE MOVES

* The Thomson Reuters-Jefferies CRB index <.CRB>, a global commodities benchmark, fell 0.91 percent in early trade.

* Brent crude slipped below $108 per barrel as investors worried a European agreement on closer fiscal union might not be enough to contain the region's debt crisis or support growth.

* Gold hit three-week lows, after a rise in the dollar prompted enough selling to push the bullion price through a key level of support.

* Copper fell to its lowest in nearly two weeks on the view that industrial demand will weaken going into next year, with Europe's move towards deeper economic integration seen as insufficient to deal a final blow to the region's debt crisis.

CANADIAN STOCKS TO WATCH

* Encana Corp. : The company will sell Alberta natural gas assets to the gas-distribution unit of Centrica Plc for C$58 million and some other properties, extending a string of sales as Encana grapples with low gas prices.

* Suncor Energy : The energy company said on Sunday it was withdrawing from Syria as a result of sanctions announced by the European Union on December 2.

* Sun Life Financial : The insurer will stop marketing variable annuity and individual life insurance products in the United States by the end of the year to focus on growing its U.S. group insurance and employee benefits business.

* Lundin Mining : The company expects a rise in zinc and copper production in 2013 and 2014, helped by higher grades of ore and a ramp up of its production facility.

* Gran Tierra Energy Inc. : The oil and gas exploration company said its CFO, Martin Eden, has been placed on medical leave to recover from emergency surgery and appointed James Rozon as the acting CFO.

* Canacol Energy : The company expects higher production and capital budget for calendar 2012, and said it is on track to exit this year with about 14,000 net barrels of oil per day.

* Afferro Mining Inc. : Severstal reached agreement to acquire the remaining 38.5 percent stake in the Putu iron ore project from Afferro for an initial $65 million, plus a possible $50 million additional future payment.

ANALYST RECOMMENDATIONS

Following is a summary of research actions on Canadian companies reported by Reuters.

* Galane Gold Ltd coverage started with speculative buy rating at Canaccord Genuity

* Kirkland Lake Gold Inc price target cut to C$28 from C$29 at CIBC

* Laurentian Bank of Canada price target raised to C$51 from C$50 at CIBC

* National Bank of Canada price target cut to C$75 from C$76 at CIBC

* Newalta Corp price target raised to C$16.50 from C$16.00 at CIBC

* Pacific And Western Credit
price target cut to C$1.60 from C$2.50 at Canaccord Genuity

* RioCan REIT resumed coverage with sector perform at National Bank Financial

* Suncor Energy Inc price target cut to C$45 from C$46 at CIBC

* Western Energy Services Corp coverage started with sector outperformer rating at CIBC

($1= $1.02 Canadian)

(Reporting by Karan Khemani; Editing by Jeffrey Hodgson)