CANADA STOCKS-TSX plunges 4 percent as fears grow, oil dives

Mon Aug 8, 2011 3:58pm EDT
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 * TSX tumbles 526.86 points, or 4.33 percent, to 11,635.31
 * Hits lowest since Aug. 25, 2010
 * Cut to U.S. AAA rating shakes investor confidence
 * Falling oil prices weigh on energy shares
 * All 10 sectors lower, led by oil and gas
 (Recasts, adds analyst comment)
 By Trish Nixon
 TORONTO, Aug 8 (Reuters) - Toronto's main stock market
index plunged more than 4 percent on Monday to hit a near
one-year low, mirroring U.S. stocks and the price of oil, as a
downgrade of the U.S. credit rating shook investor confidence
 The fallout from Standard & Poor's downgrade of the United
States pushed world stocks to their lowest level in nearly a
year as investors fled equities to the safety of gold and
bonds. [MKTS/GLOB]
 "I would refer to it as close to capitulation. Any day when
you have the S&P down nearly 500 points and the Dow off over
500 points, I would consider it an emotional panic on the part
of investors," said Paul Taylor, chief investment officer at
BMO Harris Investment Management Inc.
 At 3:56 PM (1956 GMT) the resource-heavy Toronto Stock
Exchange's S&P/TSX composite index .GSPTSE was down 526.86
points, or 4.33 percent, to 11,635.31.
 Earlier in the session it fell to 11,617.81, its biggest
one-day fall in more than two years and its lowest point since
Aug. 25.
 The sell-off was broad and deep, led by energy issues. The
sector fell 6.7 percent as the price of oil plunged 6 percent,
crashing below technical support levels. Suncor Energy SU.TO
was the most influential decliner, down 6.2 percent at C$30.35.
 The economically-sensitive financial sector also weighed
heavily, Manulife Financial MFC.TO down 8.34 percent at
C$12.53, and Royal Bank of Canada RY.TO shedding 3 percent to
 Gold-miners were seen as a relative safe-haven investment,
with the price of bullion vaulting to a record over $1,715 an
ounce. Barrick Gold ABX.TO was up 2.25 percent to C$45.90,
topping the minority of advancers that were mostly gold miners.
Goldcorp gained 2 percent at C$46.29  G.TO  [GOL/]
 All told, materials, home to gold-mining stocks, were down
1.25 percent with the index's gold subgroup helping to cushion
losses, up 2.43 percent.
"Concern has been intensifying," said Elvis Picardo
strategist and vice president of research at Global Securities
in Vancouver. "But its more like restrained panic than outright
panic at this stage."
 (Editing by Jeffrey Hodgson)