July 7, 2008 / 5:52 PM / 9 years ago

UPDATE 2-Toronto stocks shed 2 pct in broad fall on lower oil

(Updates to midday)

*TSX drops more than 2 percent in broad selloff

*Resource shares lead the way as oil prices fall

*Concerns emerge over upcoming corporate earnings

TORONTO, July 7 (Reuters) - The Toronto Stock Exchange’s main index shed more than 2 percent on Monday, in a broad and swift decline sparked by resource shares that were hit by a sharp tumble in oil prices.

Sagging energy shares led the retreat, in tandem with a drop of more than 2 percent in crude oil prices to about $141 a barrel, as investors eyed Iran’s long-running dispute with the West over its nuclear work amid signs the country might be more flexible in negotiations.

Canadian Natural Resources (CNQ.TO) was down C$4.15, or 4.3 percent, at C$91.66, and Canadian Oil Sands Trust COS_u.TO slid C$2.69, or 5.1 percent, to C$49.61. The two companies were among the biggest drags on the index, with the influential energy group down 3.7 percent.

The benchmark S&P/TSX composite index .GSPTSE fell 312.38 points, or 2.23 percent, at 13,698.01 at midday, with all its 10 main sectors in negative territory.

Lofty oil prices and the impact of higher energy costs on company profits and consumer spending also raised concerns about the prospect of a ream of weak results in the upcoming corporate earnings season.

“I think there’s some reasonable expectation that many, many sectors of the market are going to be soft,” said Peter Chandler, senior vice-president at Canaccord Capital in Waterloo, Ontario.

“I think the market’s starting to move ahead of those earnings to probably discount what’s going to be, at best, a pretty mediocre period of results.”

Falling gold producers and other miners also undermined the benchmark index, while gold prices lost their shine amid a stronger U.S. dollar. Kinross Gold (K.TO) slipped 67 Canadian cents, or 2.9 percent, to C$22.51.

On the upside, Petaquilla Copper’s PTC.TO shares more than doubled to C$1.93 after its joint venture partner Inmet Mining IMN.TO said it would make an all-cash C$320 million ($314 million) bid for the company.

Inmet fell C$1.70, or 2.7 percent, to C$61.82.

Shares of Angiotech Pharmaceuticals ANP.TO dipped 17 Canadian cents, or 5.8 percent, to C$2.76 after the specialty pharmaceutical and medical device company said it would shift its focus by forming a new subsidiary. ($1=$1.02 Canadian) (Reporting by Leah Schnurr; Editing by Bernadette Baum)

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