CANADA STOCKS-TSX slides on GDP data, oil, AIG loss

Mon Mar 2, 2009 10:49am EST
 
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* 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: Quote).

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."   Continued...