CANADA STOCKS-TSX dives 3.8 percent as economic worries weigh

Tue Jan 20, 2009 5:57pm EST
 
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* Energy, financials lead TSX retreat

* Materials only advancer as gold issues shine

* Suncor biggest decliner, reports rare loss (Adds details, analyst comments)

By Natalie Armstrong

TORONTO, Jan 20 (Reuters) - Toronto's main stock index fell 3.8 percent on Tuesday as a relentlessly gloomy global economic outlook spurred a broad-based selloff led by energy and financial issues.

While oil prices jumped 6 percent ahead of the expiration of the February U.S. futures contract, energy shares led the TSX retreat, slumping 6.8 percent.

Shares of Suncor Energy (SU.TO: Quote), the day's biggest decliner, slumped 15.84 percent to end at C$22.10 after Canada's second-biggest oil sands producer reported a quarterly loss, slashed capital spending and halted a C$20.6 billion oil sands expansion. [ID:nBNG347039]

Suncor is the latest oil sands producer to cut expansion plans and many analysts say new projects need crude prices to be much higher than the current level of around $39 a barrel. [ID:nN20422515]

"Most of those oil sands projects are either canceled or put on hold," said Sal Masionis, stockbroker at Brant Securities.   Continued...