UPDATE 3-Toronto stocks sink on fears of global slowdown

Tue Oct 7, 2008 3:09pm EDT
 
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* Volatile session sees TSX up, then down 300 points

* Energy sector leads retreat despite oil rise

* Materials sector gets lift from gold price (Recasts, adds analyst comment, details, updates figures)

TORONTO, Oct 7 (Reuters) - The Toronto Stock Exchange's main index tumbled on Tuesday afternoon in a volatile session, as energy and bank issues weakened on persistent worries about the fallout from the credit crisis.

The TSX index retreated after charging nearly 300 points higher earlier in the day, before it turned negative and slid 300 points lower.

The heavily weighted oil and gas sector, which helped the initial rally, led the way down by 3.4 percent even as crude CLc1 edged higher above $90 a barrel.

"People are still not convinced here that the oil prices won't be heading lower in the face of what we are now viewing as a global recession," said Lex Kerkovius, senior research analyst at McLean & Partners Wealth Management Ltd in Calgary. "People are still very skeptical."

He added there is a "real threat in investors' eyes" that the oil price will move lower given signs of a faltering global economy.

Shortly after 2:25 p.m. (1825 GMT), the S&P/TSX composite index .GSPTSE was down 185.71 points, or 1.82 percent, at 10,044.72, with all but one of its 10 main groups lower.   Continued...