UPDATE 3-Toronto stocks hit hard by slumping commodities

Tue Sep 9, 2008 5:55pm EDT
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*TSX tumbles as resource shares drop with commodity prices

*Index closes near January's 2008 low

(Adds details, quotes)

By Natasha Elkington

TORONTO, Sept 9 (Reuters) - The Toronto Stock Exchange's main index plunged more than 3 percent on Tuesday, weighed down by falling commodity prices and closing in on January's 2008 low.

The heavyweight materials and energy sectors led the way down. Oil prices tumbled on expectations OPEC would leave output targets unchanged and as the hurricane threat to U.S oil operations in the Gulf of Mexico eased.

In the oil patch, Canadian Natural Resources CNQ.TO fell 6.9 percent to C$74.50.

A drop in metals prices hurt the materials sector, where fertilizer producer Potash Corp of Saskatchewan POT.TO, one of the biggest losers, was down 7.5 percent to C$150.27.

The large financial sector held up better than the resource groups, but still fell 1.2 percent as worries about the ability of U.S. investment bank Lehman Brothers LEH.N to raise capital fueled concern about the broader banking sector.   Continued...