4 Min Read
* Energy sector down 5.3 pct as oil slides below $42
* Canada loses 70,600 jobs in Nov., sharpest since '82
* RBC sags after reports lower quarterly profit (Adds quote, details)
By Jennifer Kwan
TORONTO, Dec 5 (Reuters) - The Toronto Stock Exchange's main index fell more than 2 percent on Friday morning as resource issues dropped on lower commodity prices and steep job losses in Canada and the United States added to the dark economic outlook.
Leading the way down were the big energy and materials sectors, which fell 5.3 percent and 6.5 percent, respectively, as oil CLc1 dropped below $42 a barrel [ID:nSP396483], while gold and base metals were also lower.
The big tumble in the price of oil has hit the resource-heavy Toronto market hard, said John Ing, president of Maison Placements Canada.
"Forty dollar oil means a good part of the oil patch doesn't make very much money and I think analysts had expected oil to rally, bounce, and as oil goes to new lows it definitely has hurt a very big part of the TSX index," said Ing.
Shortly after 11:00 a.m. (1600 GMT), the S&P/TSX composite index .GSPTSE was down 203.61 points, or 2.53 percent, at 7,854.21, extending losses to a fifth straight session. Earlier, the market turned positive but quickly lost steam.
Eight of the TSX's 10 main sectors were lower.
Weighing on investor sentiment was grim jobs data from both sides of the border, analysts say.
Canada registered 70,600 job losses in November, the most in any month since June 1982, fueling expectations of a big interest rate cut next week and likely adding further tensions to the political battle in Ottawa. [ID:nN05253705]
In the United States, employers slashed payrolls by an unexpectedly high 533,000 in November, data showed. [ID:nHKG345012]
"There have been very negative expectations, very negative sentiment overall and there's no reason in the minds of most to change that," said Bob Gorman, chief portfolio strategist at TD Waterhouse.
"It's reinforcing already negative views, no question."
In earnings, Royal Bank of Canada (RY.TO) fell 1.2 percent to C$36.74 after Canada's biggest bank said its quarterly profit fell 15 percent as higher loan loss provisions and previously announced securities losses pushed down results. [ID:nN05276999]
The broader financials group eked out a 0.3 percent gain.
"That group, as we know, has been under pressure," said Ing. "They have recently been replenishing their balance sheets with their preferreds and the group has stopped going down, so that's probably a positive."
BCE Inc (BCE.TO) shares were down 1.4 percent at C$22.63. The telecom giant said on Friday it has not received an offer from private equity funds to take a minority stake. [ID:nN05436951] ($1=$1.30 Canadian) (Reporting by Jennifer Kwan; editing by Rob Wilson)