UPDATE 2-Toronto stocks cut losses after 10 pct slide

Mon Oct 6, 2008 12:05pm EDT
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* Oil and gas sector falls 9 pct, leads market tumble

* Financial group declines after European selloff

* Scotiabank sees Canadian recession (Adds quotes, details throughout)

By Ka Yan Ng

TORONTO, Oct 6 (Reuters) - The Toronto Stock Exchange's main index was down nearly 5 percent by late Monday morning, as it managed to regain some ground after posting its biggest intraday drop since October 1987

Shortly after 11:20 a.m. (1520 GMT), the S&P/TSX composite index .GSPTSE was down 613.19 points, or 4.68 percent, at 10,190.16, with all 10 main groups in the red. Earlier in the day the TSX had been down about 1,100 points, or more than 10 percent.

The fall was led by a sharp retreat in the energy sector as oil prices tumbled on concerns the global credit crisis would drag the world economy into recession.

Crude oil prices fell to an eight-month low below $90 a barrel, dragging the Toronto energy sector down 9.2 percent.

Canadian Natural Resources CNQ.TO was among the top net losers, down 8.2 percent at C$58.65. Imperial Oil IMO.TO dropped 11.4 percent to C$36.80, while EnCana ECA.TO fell 5.5 percent to C$55.79. Suncor SU.TO slid 11.2 percent to C$32.37.   Continued...