3 Min Read
* TSX down 4.11 percent at 7,789.33
* Energy, financials, materials sectors lead slide
* Canada's Q4 GDP contracts, worst performance since '91
* Nortel flat after reports lower quarterly profit (Adds details, quote)
By Jennifer Kwan
TORONTO, March 2 (Reuters) - Toronto's main stock index extended its fall on Monday morning, dropping 4 percent on weak domestic GDP data, slumping oil prices and a huge loss at U.S. insurer AIG (AIG.N).
The Toronto market was swept up in a global rout that saw world stocks fall to their lowest levels in nearly six years [ID:MKTS/GLOB], hurt in part by American International Group's $61.7 billion quarterly loss and as it took another multibillion dollar lifeline from Washington. [ID:nL2130432]
The grim AIG results weighed heavily on investor confidence, which spilled over into Canada and helped drag the TSX financials sector down 4.8 percent.
"It points to further weakness in the financial system," said Steve Ibel, institutional equities trader at Beacon Securities, in Halifax, Nova Scotia. "There's still some uncertainty about Canadian banks out there, even though the valuations do look compelling."
The TSX energy sector dropped 5.8 percent as crude fell below $42 a barrel on concerns about the deteriorating global economy.
Materials slumped 4.7 percent with Potash Corp of Saskatchewan (POT.TO) down 7 percent at C$99.37.
Ibel also said weak Canadian GDP data for the fourth quarter added to the negative tone.
Statistics Canada said before markets opened that the economy contracted at an annualized rate of 3.4 percent in the quarter, the worst performance since the first quarter of 1991, though it was slightly better than market expectations of a 3.6 percent downturn. [ID:nN02254034]
At 10:17 a.m., (1517 GMT), the S&P/TSX composite index .GSPTSE was down 333.69 points, or 4.11 percent, at 7,789.33, with all 10 of its main groups lower.
Among individual stocks, Nortel Networks Corp NT.TO was unchanged at 10.5 Canadian cents after it said its fourth-quater loss more than doubled, as it booked more than $2 billion in non-cash writedowns and saw revenues plunge.
Stocks on the upside included Fairfax Financial (FFH.TO), up 0.9 percent at C$311.50, and Shoppers Drug Mart SC.TO, up 0.4 percent at C$43.44
$1=$1.29 Canadian Reporting by Jennifer Kwan; editing by Rob Wilson