CANADA STOCKS-TSX sags as energy, financials weigh

Thu Mar 5, 2009 10:41am EST
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* TSX down 1.33 percent at 7,711.07

* Energy sector retreats as oil price drops

* Financials down on economic worries (Adds details, quotes)

TORONTO, March 5 (Reuters) - Toronto's main stock index was lower on Thursday morning, as concerns about the global economic outlook pulled down energy and financial shares.

The weakness followed a big bounce in the previous session when optimism over new stimulus measures in China helped lift oil prices and energy shares.

However, on Thursday, Premier Wen Jiabao said China would ramp up deficit spending this year to hit its 8 percent growth target, but did not announce an increase in the country's two-year economic stimulus plan. [ID:nSP395150].

"It took the wind out of the sails of the market because that was the driving force yesterday," said Gareth Watson, Canadian equity adviser at ScotiaMcLeod's Portfolio Advisory Group.

Investor worries also rose after General Motors (GM.N: Quote) warned about its viability, and remained cautious about the outlook for General Electric (GE.N: Quote).

"There's not a lot of positive news to hang our hats on," said Watson.   Continued...