UPDATE 4-Toronto stocks hit hard by rate decision, resources

Tue Jun 10, 2008 4:40pm EDT
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(Updates closing numbers, adds details)

*Index slides after central bank holds interest rates

*Resources fall as hurt by selloff in commodities

TORONTO, June 10 (Reuters) - The Toronto Stock Exchange's main index closed more than 1 percent lower on Tuesday after the Bank of Canada unexpectedly left interest rates unchanged and oil and gold prices weakened.

The central bank's decision to take a break in cutting rates set the tone for the session right from the start, disappointing investors who had largely expected a quarter-point cut.

Tumbling resource shares added to the downturn as commodity prices were clipped by a gaining U.S. dollar. In the energy sector, Suncor Energy SU.TO lost C$2.67, or 3.8 percent, to C$67.33. Among gold producers, Barrick Gold ABX.TO was down C$2.81, or 6.6 percent, at C$40.11.

The S&P/TSX composite index .GSPTSE closed down 224.56 points, or 1.5 percent, at 14,736.20 with all but two of its 10 main sectors pointing lower. It had earlier fallen by as many as 300 points.

Comments from U.S. Federal Reserve Chairman Ben Bernanke that signaled the central bank will resist rising inflation pressured commodities prices while the greenback rose.

Oil fell $3, following an unprecedented spike of more than $10 at the end of last week, which rattled markets and stoked worries over the impact of high oil on consumer spending and on prospects for the global economy.   Continued...