August 5, 2010 / 8:47 PM / 7 years ago

CANADA STOCKS-TSX undercut by Manulife's big loss

3 Min Read

*TSX falls 70.28 points, or 0.59 percent, to 11,774.77

*Manulife, down 11.3 percent, weighs on TSX (Updates to close, adds quote)

By Jennifer Kwan

TORONTO, Aug 5 (Reuters) - Toronto's main stock index closed lower on Thursday as financial shares dropped after Manulife Financial Corp (MFC.TO) posted a steep quarterly loss.

Manulife, Canada's largest life insurer, was the most heavily traded stock on the TSX and fell 11.3 percent to C$14.20. [ID:nN05256071]

Its big loss came after Sun Life Financial (SLF.TO), Canada's No. 3 insurer, said late on Wednesday that its net profit was cut by more than half by turbulent market conditions in the second quarter. [ID:nN04261095]

Sun Life was down 4.7 percent at C$27.27.

Analysts said the market's reaction to the results was a reflection of its fragility as it worries about the possibility of a double-dip recession.

"Any kind of news that points toward that, traders get nervous," said Aaron Fennell, senior market strategist at Lind-Waldock Canada.

"Traders are very sensitive to things like earnings, anything that can indicate financial firms are not able to generate profit."

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE finished the day down 70.28 points, or 0.59 percent, at 11,774.77. The index's financial group, down 2.2 percent, led the way lower.

Analysts said the TSX was also undermined by U.S. market sentiment, which was bruised on Thursday by disappointment over U.S. weekly jobless claims data. [.N] [ID:nN05245807]

Markets are now focused on the more comprehensive U.S. July jobs report and Canadian employment data for the same month, both due on Friday morning.

Other major decliners included Suncor Energy (SU.TO), down 0.8 percent at C$34.18, and Teck Resources TCKb.TO, which dropped 3.7 percent to C$35.84.

Research In Motion RIM.TO fell 2.2 percent to C$53.06 after the BlackBerry maker faced more demands to open its smartphones to government scrutiny as Lebanon joined India, Saudi Arabia and the UAE in raising concerns over security. [ID:nN05199262]

$1=$1.02 Canadian Reporting by Jennifer Kwan; editing by Peter Galloway

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