UPDATE 2-Toronto stocks off 1.8 pct amid financial worries

Mon Sep 15, 2008 11:32am EDT
 
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* Energy sector slips with oil price on U.S. demand worry

* Gold rises on safe-haven buying; base metals slump

* Bank of Canada says will provide liquidity as required (Adds details, updates to late morning)

TORONTO, Sept 15 (Reuters) - The Toronto Stock Exchange's main index was down more than 225 points late on Monday morning, rattled by the bankruptcy filing of Wall Street's Lehman Brothers Holdings Inc LEH.N and worries over other big financial institutions.

The financial services sector, which accounts for about a quarter of the index's total weight, was down 1.2 percent -- though up from earlier lows -- with Canadian Imperial Bank of Commerce CM.TO down 3.1 percent at C$62.19.

Anxiety over the vulnerable U.S. financial sector heightened on news of the the Lehman filing See [ID:nN13574113] and a deal for Merrill Lynch MER.N to be taken over by Bank of America Corp BAC.N.

The U.S. Federal Reserve said that it would aid the battered financial industry by accepting equities as collateral for emergency loans, and investors awaited American International Group Inc AIG.N to announce a survival plan. See [ID:nN15519385.

"People are fearful," said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier. "There's a great deal of uncertainty out there. Much more than normal."

The Bank of Canada said on Monday it will provide liquidity as required to shore up financial markets spooked by the bankruptcy filing of Lehman and the sale of Merrill Lynch. See [ID:nN15409977].   Continued...