CANADA STOCKS-Economic doubts, profit-taking drag TSX lower

Tue Aug 11, 2009 5:21pm EDT
 
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* TSX drops 164.20 points, or 1.52 percent, to 10,629.47

* Financials biggest decliner, off 2.6 percent

* Mixed data fuels market caution about economic recovery (Adds details, quotes)

By Jennifer Kwan

TORONTO, Aug 11 (Reuters) - Toronto's main stock index sank on Tuesday as mixed economic data and a gloomy outlook for U.S. banks painted by a prominent analyst spurred doubt about recovery and led to profit-taking.

Hardest hit were financial and oil companies, with the index's financial group down 2.6 percent and the energy group dropping 1.7 percent.

Royal Bank of Canada (RY.TO: Quote) fell 2.4 percent to C$49.48, while Bank of Nova Scotia (BNS.TO: Quote) was down 3.1 percent at C$44.05. Insurer Manulife Financial (MFC.TO: Quote), down 1.6 percent, and Sun Life Financial (SLF.TO: Quote), down 5.2 percent, also weighed on the sector.

Canadian financials followed U.S. banks lower after comments by veteran banking analyst Richard Bove recommended taking short-term profits in U.S. bank stocks as he said he expects a pullback in share prices. [ID:nBNG503348]

The big energy sector was hit as the price of oil fell on doubts over the pace of economic recovery, in part due to disappointing U.S. wholesale business inventories data. [ID:nSP473359] Suncor Energy (SU.TO: Quote) dropped 3 percent to C$34.91, while Canadian Natural Resources (CNQ.TO: Quote) was down 2.5 percent at C$62.22.   Continued...