UPDATE 3-Toronto stocks plunge as confidence fades anew

Thu Oct 9, 2008 4:32pm EDT
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By Wojtek Dabrowski

TORONTO Oct 9 (Reuters) - The main index of the Toronto Stock Exchange plunged almost 5 percent on Thursday as mounting gloom over the state of the economy and the U.S. financial sector sent investors fleeing the market in a broad rout.

The financial sector was the biggest drag on the benchmark, sliding 7.74 percent. The energy and materials groups -- the other two pillars that buttress the Toronto market -- failed to lend support, shedding 5.03 percent and 2.47 percent, respectively.

It was the latest in a string of sessions in which the index seesaws higher and lower before settling deep in the red. The depressed climate signals investors are doubtful that recent moves by authorities around the world to resuscitate the credit markets will be enough to avoid a recession.

"This is a continuing loss of confidence," said Adrian Mastracci, portfolio manager and president at KCM Wealth Management Inc. "It's like the parachute's not opening."

The S&P/TSX composite index .GSPTSE fell 456.13 points, or 4.54 percent, to close at 9,600.18.

All but one of the 10 main subgroups of the main index moved lower. Utilities eked out a gain of 0.06 percent.

"We've got this big flood ... and it doesn't matter whether you're a financial, doesn't matter if you're an oil or a commodity, you're just in the way and you just get swept up in it," Mastracci said.

The top losers of the day included financial heavyweights such as Canadian Imperial Bank of Commerce CM.TO, which gave up 9 percent to finish at C$50.50. Insurer Sun Life Financial SLF.TO fell 14 percent to C$27.55, its lowest level since mid-2003.

Manulife MFC.TO, another big insurance house, fell to its lowest level since late 2005, sliding 11.4 percent to close at C$30.24.

($1=$1.15 Canadian) (Reporting by Wojtek Dabrowski; editing by Peter Galloway)