December 18, 2008 / 10:03 PM / 9 years ago

CANADA STOCKS-TSX falls as energy drop leads broad selloff

2 Min Read

* Toronto, TSX Venture exchanges open after Wednesday halt

* Energy leads TSX lower as oil falls 8 percent

* Nine of 10 subgroups lower (Adds official close, comment, details)

By Cameron French

TORONTO Dec 18 (Reuters) - Toronto's main stock index fell nearly 300 points on Thursday as plunging oil prices hammered energy issues, while materials and financial stocks felt the sting of deepening worries about the health of the global economy.

With the exchange shut down on Wednesday due to technical problems, the energy and materials sectors suffered from pent-up demand to sell.

Oil prices dropped 8 percent -- well below $40 a barrel -- on slumping demand and swelling U.S. inventories, building on a 7 percent drop from the previous day that had not been factored into Toronto-listed stocks.

The energy sector dropped 7.2 percent, while materials issues retreated 4.7 percent as gold stocks on other exchanges were also weaker on Wednesday.

Oil and gas producer Nexen NXY.TO dropped 8 percent to C$20.58, while Goldcorp dropped 12.4 percent to C$34.49.

All told, the S&P/TSX composite index .GSPTSE fell 298.76 points, or 3.42 percent, to 8,425.35.

"What we saw was really a 2-for-1 day today, so that has exaggerated the moves in some of the stocks," said John Ing, president of Toronto investment dealer Maison Placements.

Pre-market tension focused not just on where stocks would open, but whether trading would begin at all, as the previous day's unexpected shutdown frustrated users and sent some investors to rival markets.

Tom Kloet, chief executive of exchange owner TMX Group (X.TO), issued an apology shortly after trading on both the main exchange and the junior Venture exchange began, saying "all efforts are being made to ensure that such a disruption in trading does not happen again."

TMX shares slipped 1.6 percent to C$24.21.

All but one of the 10 TSX subgroups weakened on Thursday.

$1=$1.21 Canadian Reporting by Cameron French; editing by Peter Galloway

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