UPDATE 3-Rate decision, resources send Toronto stocks lower

Tue Jun 10, 2008 3:07pm EDT
 
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(Updates to mid-afternoon)

* Index extends declines to nearly 2 percent

* Resources fall amid selloff in commodities

* Bank of Canada unexpectedly holds interest rates steady

TORONTO, June 10 (Reuters) - The Toronto Stock Exchange's main index stumbled further on Tuesday, shedding close to 2 percent as resources followed commodity prices lower and undermined by a surprise decision by the Bank of Canada to hold interest rates steady.

Comments from the U.S. Federal Reserve that it would resist rising inflation caused the greenback to strengthen and led to sharp declines in commodity prices.

The energy and materials groups led the way down, giving up 2.8 percent and 4 percent respectively.

A more than $3 retreat in the price of oil stung the heavyweight energy sector, as Canadian Natural Resources (CNQ.TO: Quote) fell C$2.83, or 2.7 percent, to C$102.68, and Suncor Energy (SU.TO: Quote) lost C$2.94, or 4.2 percent, to C$67.06.

Lower bullion prices weighed on the materials sector, as gold producers slipped. Goldcorp (G.TO: Quote) was down C$2.85, or 6.7 percent, at C$39.66 and Barrick Gold (ABX.TO: Quote) was off C$3.06, or 7.1 percent, at C$39.86.   Continued...