June 20, 2008 / 7:14 PM / 9 years ago

UPDATE 2-Toronto stocks sag under drag of financials

3 Min Read

(Updates to midafternoon)

* TSX falls more than 100 points as banks weigh

* Consumer shares fall amid inflation worries

* Energy issues ease from earlier gains

TORONTO, June 20 (Reuters) - The Toronto Stock Exchange's main index slid more than 100 points on Friday as bank shares tumbled amid worries over more mortgage-related problems and writedowns for financial institutions south of the border.

Although analysts noted that Canadian financials are in better shape than many of their U.S. and global counterparts, the jitters knocked 1.7 percent off the Bay Street sector.

"I think we've seen the challenges on our Canadian banks," said Brian Pow, vice-president, research and equity analyst, at Acumen Capital Partners in Calgary.

"That said, we're still globally viewed on the banking system, so we get painted with the same brush."

The S&P/TSX composite index .GSPTSE was down 125.77 points, or 0.85 percent, at 14,664.38 in the afternoon with nine of its 10 main sectors in retreat. The retreat added to Thursday's 283-point plunge.

All the major banks were lower, with Canadian Imperial Bank of Commerce (CM.TO) off C$1.58, or 2.5 percent, at C$61.92. and Royal Bank of Canada (RY.TO) down 99 Canadian cents, or 2 percent, at C$47.90.

Consumer shares also took the index lower on concerns over the impact of inflation on consumer spending.

The consumer discretionary and staples sectors were down 2 percent and 0.9 percent respectively. Clothier Gildan Activewear (GIL.TO) slipped 74 Canadian cents, or 2.7 percent, to C$26.32, while Shoppers Drug Mart SC.TO was off 49 Canadian cents, or 0.9 percent, to C$56.90.

Data released yesterday showed the inflation rate rose last month on sharply higher gasoline prices. The market largely ignored Friday's numbers that showed retail sales rose in April.

"There's more things getting taken out of (people's) wallets, which limits their ability just to go do normal spending," said Pow.

Energy shares eased from earlier gains despite the firm price of crude. Oil and gas producers dipped 0.6 percent after supporting the index earlier.

Canadian Oil Sands Trust COS_u.TO was down 79 Canadian cents, or 1.5 percent, at C$50.71, and Canadian Natural Resources (CNQ.TO) fell C$1.06, or 1 percent, to C$102.46.

Shares of tech company Wi-Lan Inc WIN.TO shot up 12.6 percent, or 22 Canadian cents, to C$1.97 after it said it launched a new round of patent infringement lawsuits targeting Motorola MOT.N, Research In Motion RIM.TO, and UTStarcom Inc (UTSI.O).

Cameco Corp (CCO.TO) was up 42 Canadian cents, or 1.1 percent, at C$37.98 after the No. 1 uranium producer said it will buy a 24 percent stake in a General Electric-Hitachi uranium enrichment venture. ($1=$1.02 Canadian) (Reporting by Leah Schnurr; editing by Rob Wilson)

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