CANADA STOCKS-TSX rattled by slide in bank shares

Wed Nov 19, 2008 10:10am EST
 
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* Scotiabank's C$595 million charge spurs early slide

* TSX relinquishes gains made in previous session

* Energy shares also weigh as oil price turns lower

(Adds details)

TORONTO, Nov 19 (Reuters) - The Toronto Stock Exchange's main index was lower on Wednesday and erased gains made in the previous session due to a sharp slide in the heavily weighted financial index.

The drag on the market was traced to news late on Tuesday that Bank of Nova Scotia BNS.TO would take a fourth-quarter charge of C$595 million after tax, which sparked concern about the health of the earnings statements due from Canadian banks in early December.

"I think this may be a reality check on the disappointment that's going to be in the banks' earnings," said John Kinsey, portfolio manager at Caldwell Securities Ltd. "I think people maybe were hoping that we could skate through without any news of writedowns ... but this may be the start of it now."

The S&P/TSX composite index .GSPTSE was 70.92 points lower, or 0.8 percent, at 8,762.84 shortly after the market opened. That wiped out Tuesday's 40-point gain.

Shares of Scotiabank were down C$3.39, or 1.3 percent, at C$35.87, while Canadian Imperial Bank of Commerce CM.TO shares dropped C$2.52, or 1.3 percent, to C$49.60.

The financial group, which makes up about a third of the index, was down 2.8 percent, while the energy group was off 0.3 percents as oil prices fell to a 22-month low.

($1=$1.23 Canadian) (Reporting by Frank Pingue; Editing by Peter Galloway)