CANADA STOCKS-TSX lower as Manulife weighs on financials

Tue Dec 2, 2008 10:41am EST
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*TSX lower after 9 percent tumble on Monday

*Manulife falls on profit warning, new equity issue

*Ted Rogers dies at 75; Rogers shares fall 1 pct

(Adds quotes, details)

TORONTO, Dec 2 (Reuters) - The Toronto Stock Exchange's main index was lower in choppy activity on Tuesday morning due to weakness in financial shares, which dropped after Manulife Financial Corp (MFC.TO: Quote) warned it would report a quarterly loss and said it will issue more than C$2 billion in new stock.

Manulife, which dropped 5.1 percent to C$19.42, was the most heavily-traded stock and helped to pull the index down from an opening gain. Manulife said it would report a fourth-quarter loss of C$1.5 billion and issue C$2.125 billion in common equity to bolster its capital position. [ID:N02548876]

"That will cast a shadow across the Canadian financial services industry today because it's never good to have dilutive equity," said Paul Taylor, chief investment officer at BMO Harris Investment Management Inc.

The broader financial sector fell 2 percent with Bank of Nova Scotia (BNS.TO: Quote) down 2.2 percent at C$34.09, and Royal Bank of Canada (RY.TO: Quote) down 1.2 percent at C$38.98.

Shortly after 10:10 a.m. (1510 GMT), the S&P/TSX composite index .GSPTSE was down 26.33 points, or 0.31 percent, at 8,379.88, with four of its 10 main groups lower.   Continued...