CANADA STOCKS-TSX retreats on commodity price drop

Mon Dec 1, 2008 2:42pm EST
 
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*TSX falls as much as 8 pct; erases Friday's 5.9 pct rise

*Energy shares drop as oil falls below $50 a barrel

*Grim U.S. manufacturing data stirs concern about Canada (Recasts, adds quote, details, updates figures)

By Jennifer Kwan

TORONTO, Dec 1 (Reuters) - Toronto's main stock index .GSPTSE tumbled on Monday afternoon in a broad sell-off as resource shares dropped along with commodity prices and gloomy U.S. manufacturing data signaled a deepening economic slump.

The Toronto Stock Exchange's six-day streak of gains appeared to be coming to an end as the energy sector fell 11 percent. Oil dropped below $50 a barrel after OPEC decided to wait until mid-December to make another cut in output. [ID:nSP341852] Among energy stocks EnCana Corp (ECA.TO: Quote) fell 10.7 percent.

Weakness in metals prices helped to push down the mining-heavy materials sector, which was down 10.7 percent. Goldcorp Inc (G.TO: Quote) sank 13.6 percent.

The Toronto market was pushed lower by weak manufacturing data from China and Europe, while data showing the Canadian economy had grown faster than expected in the third quarter had little influence on trading.

Indeed, the biggest impact came from U.S. data showing factory activity fell to its weakest in November since the 1981-82 recession. [ID:nN01439823].   Continued...