UPDATE 4-Toronto stock index sinks as resources tumble

Tue Sep 2, 2008 3:21pm EDT
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* TSX extends losses to fall 3 percent

* Energy shares tumble along with oil prices

* Materials sector hurt by declines in other commodities (Updates to late afternoon)

TORONTO, Sept 2 (Reuters) - The Toronto Stock Exchange's main index plunged more than 400 points on Tuesday, led by a steep selloff in energy and materials issues sparked by tumbling commodity prices.

The heavyweight energy sector led the retreat, with oil prices dropping more than $6 a barrel as worries over the impact from Hurricane Gustav on the U.S. oil industry faded.

The materials sector, home to resource shares, also knocked the index lower as gold and other metals followed oil prices lower.

The energy and materials sectors fell 5.7 percent and 5.5 percent, respectively. Canadian Natural Resources CNQ.TO was down 5.8 percent at C$85.42, while Inmet Mining IMN.TO lost 9 percent to C$58.22.

The S&P/TSX composite index .GSPTSE was down 421.16 points, or 3.06 percent, at 13,350.09.

The consumer discretionary sector was the only group to post gains, rising a slim 0.2 percent as it benefited from the drop in oil prices, which eased worries over consumer spending. Among the gainers, hardware store chain Rona RON.TO rose 3.7 percent to C$14.00.

Shares of convenience store operator Alimentation Couche-Tard ATDb.TO jumped 5.4 percent to C$13.70 after it reported a drop in profit but revenue rose. See: [nN02395192]. ($1=$1.07 Canadian) (Reporting by Leah Schnurr; editing by Rob Wilson)