CANADA STOCKS-TSX dives as Goldman fraud charge hits hard

Fri Apr 16, 2010 1:24pm EDT
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* TSX down 1.13 percent at 12,073.43.

* Resources, financials lead index down (Releads on Goldman, updates prices, adds quotes)

By Claire Sibonney

TORONTO, April 16 (Reuters) - Toronto's main stock index fell as much as 1-1/2 percent on Friday as financial and resource shares were yanked lower by news that Goldman Sachs has been charged with fraud by the U.S. securities regulator.

U.S. equity markets also tumbled after the U.S. Securities and Exchange Commission alleged fraud in the investment bank's structuring and marketing of a debt product tied to subprime mortgages, which cost investors more than $1 billion.

The Toronto index's heavily weighted financial sector dropped 0.7 percent with Royal Bank of Canada (RY.TO: Quote), the country's biggest lender, down 0.6 percent at C$61.00, and No. 2 Toronto-Dominion Bank (TD.TO: Quote) off 0.7 percent at C$76.43.

"The Goldman Sachs story is getting most of the market participants to reduce risk, close up positions, see what's going to come out of this and put some money on the sidelines," said Francis Campeau, a broker at MF Global Canada, in Montreal.

With investors moving riskier assets off the table, resource shares extended earlier losses as commodity prices reeled from the Goldman news.

Oil prices fell 3 percent to below $83 a barrel, pushing the energy sector down 1.7 percent. [O/R]   Continued...