CANADA STOCKS-TSX dives as economic gloom chills investors

Wed Nov 12, 2008 5:09pm EST
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*TSX drops 5.5 percent

*Panic selling, drop in commodities drive rout

*Market bellwethers are among biggest decliners (Adds details)

By Wojtek Dabrowski

TORONTO, Nov 12 (Reuters) - The benchmark index of the Toronto Stock Exchange dropped more than 5 percent on Wednesday as weakness in commodity prices and nagging economic worries spurred another round of panic selling.

The session saw nine of the 10 subgroups of the S&P/TSX composite index .GSPTSE give up ground. The key energy and materials sectors dropped 7.5 percent and 9.9 percent, respectively. Financials fell 4.4 percent.

"A section of the market -- and myself included -- thought that perhaps we saw panic peak in October," said Elvis Picardo, analyst and strategist at Global Securities in Vancouver. "No such luck."

The biggest losers included bellwether names like Potash Corp POT.TO, EnCana Corp ECA.TO and Canadian Pacific Railway CP.TO as investors appeared to dump equities wholesale in hopes of escaping the market meltdown.

"These (stocks) are barometers of market sentiment so when something like this happens, investors basically get even more panicky," Picardo said.   Continued...