REFILE-CANADA STOCKS-TSX falls sharply as bank worries nag

Tue Mar 3, 2009 12:56pm EST
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(Refiles to fix time to p.m. from a.m. in sixth paragraph)

* TSX drops 1.53 percent to 7,569.52

* Financials lead TSX lower, down 4 percent

* Bank of Canada cuts rates to record low 0.5 pct (Adds details, quote)

By Jennifer Kwan

TORONTO, March 3 (Reuters) - Toronto's key stock market index fell sharply on Tuesday morning with financial shares dropping anew on concern about eroding credit quality at Canada's big banks.

Financials dropped 4 percent after the last two of Canada's six largest banks -- Bank of Nova Scotia (BNS.TO: Quote) and Bank of Montreal (BMO.TO: Quote) -- reported quarterly results that showed they remained profitable even as the global financial crisis raged, but that bad loans were on the upswing. [ID:nN03459519]

Shares of Bank of Nova Scotia fell 0.6 to C$26.86, while Bank of Montreal fell 0.9 percent at C$26.76. Insurer Manulife Financial (MFC.TO: Quote) fell 12.1 percent to C$10.17.

"It's continued uncertainty in the sector, continued uncertainty on guidance going forward," said Peter Chandler, senior vice-president at Canaccord Capital in Waterloo, Ontario.   Continued...