CANADA STOCKS-TSX takes hit from Manulife and ends lower

Tue Dec 2, 2008 5:21pm EST
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* Market unable to rebound from Monday's sharp slide

* News that Manulife to issue stock rattles financials

* Talk of takeover for Nexen sparks rally in energy shares (Adds U.S. markets close)

By Frank Pingue

TORONTO, Dec 2 (Reuters) - The Toronto Stock Exchange's main index ended a see-saw session lower on Tuesday as news that insurer Manulife Financial (MFC.TO: Quote) will issue new stock offset rallying energy shares after talk of a takeover of Nexen Inc NXY.TO.

The tug-of-war between the slumping financial shares and rallying energy stocks left the Toronto Stock Exchange bouncing around in a wide range that saw it up as much as 120 points and down as much as 186 points.

Manulife's drag on the heavily weighed financial group kept the broader index from tagging along with a sharp rally in U.S. stock markets, which managed to bounce back from a steep slide in the previous session.

"I just think there is a lack of confidence from both buyers and sellers," said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.

Manulife shares fell 2.79 percent to C$19.89 after it said it would report a fourth-quarter loss of C$1.5 billion due to sliding markets and issue $2.1 billion in common equity to bolster its capital position. [ID:nN02548876]   Continued...