(Adds investor quotes and details throughout; updates prices) * TSX ends down 98.62 points, or 0.5%, at 20,052.25 * Posts its lowest closing level since July 20 * Technology stocks fall 2.8% * Energy advances to highest since January last year, up 2% TORONTO, Oct 4 (Reuters) - Canada’s main stock index on Monday fell to its lowest level in two and a half months as rising bond yields pressured technology stocks, offsetting a fourth straight day of gains for the energy sector. The Toronto Stock Exchange’s S&P/TSX composite index ended down 98.62 points, or 0.5%, at 20,052.25, its lowest closing level since July 20. “The market environment has been soft,” said Shailesh Kshatriya, director, investment strategies at Russell Investments. “Some of that is due to the narrative around peak growth ... More recently, higher energy prices may be contributing to potential inflation risks down the line.” The prospect of inflation forcing central banks to tighten policy sooner than expected has helped push bond yields to the highest in months. Wrangling in Washington over the debt ceiling added to upward pressure on yields. “The sectors that have benefited from yields coming down -- some of that is beginning to unwind,” Kshatriya said. Technology stocks fell 2.8%, tracking declines for the tech-heavy Nasdaq composite index, while the healthcare sector ended nearly 3% lower. “I think people are pretty cautious right now waiting to see what the earnings are going to be and we’ve also come off the first real corrective action in September,” said Gregory Taylor, portfolio manager at Purpose Investments. The TSX fell 2.5% in September, ending a run of seven straight monthly gains. Limiting the Toronto market’s losses on Monday were energy stocks, which rose 2% to the highest since January last year. U.S. crude oil futures settled 2.3% higher at $77.62 a barrel after OPEC+ confirmed it would stick to its current output policy. Sun Life Financial Inc gained 2.4% after saying it will acquire U.S. dental benefits provider DentaQuest for $2.48 billion in its biggest deal in two decades. (Reporting by Fergal Smith; Additional reporting by Amal S in Bengaluru; Editing by Sandra Maler) Our Standards: The Thomson Reuters Trust Principles.