UPDATE 5-Toronto stocks battered by resources, rate move

Tue Jun 10, 2008 5:50pm EDT
 
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* Index sags after central bank holds interest rates

* Resource issues hit as commodity prices fall

By Leah Schnurr

TORONTO, June 10 (Reuters) - The Toronto Stock Exchange's main index tumbled more than 200 points 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 oil and gas sector, Suncor Energy (SU.TO: Quote) fell C$2.67, or 3.8 percent, to C$67.33. Among gold producers, Barrick Gold (ABX.TO: Quote) was down C$2.81, or 6.6 percent, at C$40.11.

Levente Mady, a broker at MF Global Canada in Vancouver, said the central bank had sounded dovish on more rate cuts in its last decision to ease rates, which is part of what caught investors so off guard.   Continued...