UPDATE 4-Toronto stocks fall as bank anxiety resurfaces

Mon Mar 3, 2008 5:05pm EST
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By Leah Schnurr

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: Quote) 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: Quote), which is also expected to report results on Tuesday, was down C$1.29, or 2.7 percent, to C$46.50.

"It's just that the rosy period for banks is over for a couple of quarters at least," said John Kinsey, portfolio manager at Caldwell Securities Ltd. "The earnings are going to be very anemic for the next little while and that is in the market, too."

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.   Continued...