UPDATE 3-Toronto stocks stumble as banks undercut resources

Mon Mar 3, 2008 4:45pm EST
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(Updates with official closing numbers, adds details)

TORONTO, March 3 (Reuters) - The Toronto Stock Exchange's main index finished lower on Monday as strength in resources was undercut by losses in the banking sector amid nagging worries over the continuing impact of the credit crunch.

The financial group shed 2.5 percent. The sector faces a number of ongoing headwinds, including fears of more writedowns related to the troubled U.S. housing market, jitters over the health of U.S. bond insurers, as well as pessimism over financial results.

Bank of Montreal BMO.TO gave up C$1.34, or 2.7 percent, to C$48.36, caught up in recent downward pressure after it warned it might have to write down its remaining C$495 million exposure to two troubled asset-backed commercial paper trusts.

Bank of Montreal, Canada's fourth-largest bank, is set to report quarter results on Tuesday. Bank of Nova Scotia BNS.TO, which is also expected to report results on Tuesday, was down C$1.29, or 2.7 percent, to C$46.50.

The S&P/TSX composite index .GSPTSE closed down 38.31 points, or 0.28 percent, at 13,544.38 with six of its 10 main groups in negative territory.

In a choppy session, the index fell more than 100 points in the late afternoon.

Also weighing on the index, BlackBerry-maker Research In Motion RIM.TO slid C$3.52, or 3.4 percent, to C$99.01, helping to pull the tech sector down 2 percent. Nortel Networks NT.TO was down 54 Canadian cents, or 6.4 percent, at C$7.94.

On the upside, shares in gold producers provided the Toronto benchmark with a bright spot. The subindex surged 3.8 percent as bullion prices set a record high for the fourth day in a row, moving toward $1,000 an ounce. Spot gold climbed as high as $989.30 before easing to $981.20.   Continued...