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, 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...