July 7, 2009 / 9:16 PM / 8 years ago

CANADA STOCKS-TSX takes 2nd big hit in two days as oil falls

* TSX falls 1.83 percent to 9,844.35

* Second straight triple-digit decline

* Energy sector off 1.22 percent, but golds rise (Adds details, commentary)

By Ka Yan Ng

TORONTO, July 7 (Reuters) - Toronto’s main stock index closed sharply lower for a second straight session on Tuesday as worries about the global economy kept the market averse to risk and pulled down heavyweight energy and bank shares.

The price of oil settled below $63 a barrel as investors sought safer havens, and that hit the TSX index’s energy group, which fell 1.22 percent. [ID:nSP379393] In the group, Canadian Natural Resources (CNQ.TO) dropped 1.72 percent to C$54.94.

Nagging concerns about the state of the U.S. economy, triggered by last week’s gloomy jobs report for June, continued to reverberate through the market with few corporate stories strong enough to buck the trend.

“I think (the U.S. jobs data) caused people to take some chips off the table. Now it seems to have accelerated,” said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.

“It seems like it’s less to do with companies and more to do with what’s going on in the economy. Stocks are sort of held hostage to this economic news. What takes precedence is people’s feeling towards the economy,” he added.

Talk of a second stimulus plan in the United States contributed to fears that the world’s biggest economy may need further propping up, and that recovery is not as near as hoped despite the $787 billion U.S. rescue package launched in February. [ID:nSP379268]

The S&P/TSX composite index .GSPTSE closed down 183.08 points, or 1.83 percent, at 9,844.35, the second consecutive triple-digit point loss in as many days. It fell more than 255 points on Monday.

Overall, nine of the market’s 10 main groups finished lower, led down by financials, which lost 2.5 percent.

Royal Bank of Canada (RY.TO) was the biggest heavyweight decliner, falling 4 percent to C$45.78, while Bank of Nova Scotia (BNS.TO) shed 3.1 percent to C$41.39.

Steady gold prices helped cushion the TSX’s slide as the mining-heavy materials group fell just 0.61 percent. Seven of the index’s top 10 heavyweight advancers were gold and metals companies, including Goldcorp (G.TO) -- the biggest mover to the upside -- which rose 1.3 percent to C$39.61.

Economic figures released in Canada showed purchasing activity and building intentions sprang back to life in June and May, respectively, soaring past expectations and suggesting the pace of economic contraction is slowing. [ID:nN07316867] But that failed to boost Toronto stocks, which were influenced more by U.S. sentiment and the path of commodity prices.

The market is also bracing for the impending second-quarter earnings season, with focus on whether corporate results will reflect the improvement in some sectors of the economy.

$1=$1.16 Canadian Editing by Peter Galloway

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