March 9, 2009 / 8:56 PM / 8 years ago

CANADA STOCKS-TSX slides to lowest close since Oct. 2003

3 Min Read

* TSX closes 0.32 percent lower at 7,566.94

* Marks lowest close since October 2003

* Materials and financials behind latest selloff (Adds comments, details)

By Frank Pingue

TORONTO, March 9 (Reuters) - Toronto's main stock index ended at its lowest close in more than five years on Monday as weaker gold prices dragged down materials shares while bank worries weighed on financial issues.

The drop in gold prices knocked the Toronto Stock Exchange's broader materials sector -- home to many of the country's top gold miners -- down by 0.98 percent, while concerns over the outlook for the global banking sector sent financials down 2.5 percent.

Goldcorp (G.TO), the biggest contributor to the TSX's latest selloff, fell 3 percent to C$36.56 while Barrick Gold Corp (ABX.TO) skidded 1.95 percent to C$36.24.

"There's really not a lot of traction in the marketplace," said Irwin Michael, portfolio manager at ABC Funds. "People are very unsure ... and in Canada they are waiting for Friday's unemployment number for February."

A 3 percent rally by the energy sector, which accounts for about 20 percent of the broader TSX index, helped cushion the slide as U.S. crude oil futures ended higher.

The S&P/TSX composite index .GSPTSE closed down 24.53 points, or 0.32 percent, at 7,566.94.

The index got off to a volatile start, sliding as much as 1 percent right after the open, before quickly turning around and rising as much as 1.4 percent, as higher oil prices bolstered energy shares.

Shortly after midday it moved back below the break-even level and remained there for the rest of the session.

The tumble by the financials index followed a report by RBC Capital Markets that said it was too early to buy Canadian bank shares and that domestic banks should consider suspending their common share dividends to preserve cash. [ID:nBNG491677]

It also followed a tumble in overseas equities as Lloyds Banking Group (LLOY.L) reached a rescue deal that will give the British government a stake of up to 77 percent [ID:nL9208557].

Royal Bank of Canada (RY.TO) dropped 2 percent to C$28.79, while insurer Manulife Financial (MFC.TO) fell 4.7 percent to C$9.20.

The index's slide would have been much steeper if not for the rally in energy shares, which bounced higher with crude prices on speculation that OPEC may cut output at its Sunday meeting. April crude was up 3.4 percent at $47.07.

"It seems to me there's anticipation of the OPEC cartel cutting production ... and so everybody just chased up the oil stocks today," said Joe Ismail, technical analyst at Maison Placements Canada.

Shares of Suncor Energy (SU.TO) jumped 10.75 percent to C$30.29, while Talisman Energy TLM.TO rose 4.8 percent to C$11.99.

$1=$1.30 Canadian Editing by Rob Wilson

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