September 3, 2008 / 8:38 PM / 9 years ago

UPDATE 2-Toronto stocks tumble as resource shares drag

3 Min Read

*TSX falls for second session as resources slide

*Energy and materials hurt by worries over resource demand

*Financials climb to end as only sector in the positive (Updates closing numbers, adds details)

TORONTO, Sept 3 (Reuters) - The Toronto Stock Exchange's main index slumped for a second day in a row on Wednesday, as concerns about falling demand for commodities dragged down resource shares.

Gains in the financial sector -- the only group to end higher -- pulled the index back from session lows as investors moved money out of the commodity-related companies and into banks. Among the gainers, Bank of Montreal (BMO.TO) rose 2.7 percent.

The index fell more than 1 percent, extending a 3 percent slide on Tuesday, as the materials and energy sectors fell along with oil and gold prices, as worries over softening demand took hold and the U.S. dollar strengthened.

In the oil patch, Canadian Natural Resources (CNQ.TO) was down 3.3 percent at C$81.98, while among gold producers, Barrick Gold (ABX.TO) fell 5.4 percent to C$33.12.

The S&P/TSX composite index .GSPTSE closed down 161.82 points, or 1.22 percent, at 13,137.72 with all but one of its 10 main sectors in negative territory. It had earlier hit a low of 12,959.86.

The materials sector led declines, giving up 3.9 percent as they were hurt by losses in the gold producers subindex. Fertilizer company Potash Corp of Saskatchewan (POT.TO) also dragged, falling 4.7 percent to C$164.53.

The oil and gas sector was down 2.3 percent as crude dropped below $109 a barrel on worries of slowing demand, while the U.S. oil sector looked likely to recover quickly from Hurricane Gustav. On Bay Street, Suncor Energy (SU.TO) slipped 2.5 percent to C$53.54.

The banking group, which has been battered by worries of further losses and fallout from the U.S. credit crunch, gained 1.5 percent, as results from the major banks last week encouraged investors.

BMO closed up 2.7 percent to C$47.35, while Royal Bank of Canada (RY.TO) gained 2 percent to C$49.64. ($1=$1.06 Canadian) (Reporting by Leah Schnurr; Editing by Frank McGurty)

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