UPDATE 1-Toronto stocks fall sharply on weaker commodities

Tue Oct 21, 2008 10:28am EDT
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* Energy issues lead decline

* Gold subindex down 6 percent

* Bank of Canada 25 bps rate cut less than expected (Adds details)

TORONTO, Oct 21 (Reuters) - The Toronto Stock Exchange's main index fell hard at the open on Tuesday as easing commodity prices put pressure on resource issues and profit-taking took hold after two consecutive days of strong gains.

The oil and gas sector fell 4.3 percent as oil slipped to nearly $71 a barrel, pressured by expectations that a global recession will cut demand for oil, which could limit the impact of any supply cuts by OPEC.[ID:nSP339775]

Suncor Energy SU.TO was off 5.5 percent at C$28.83, while EnCana ECA.TO lost 3.1 percent to C$55.33.

Shortly after 9:50 a.m. (1350 GMT), the S&P/TSX composite index .GSPTSE was down 287.17 points, or 2.8 percent, at 9,964.23, with eight of its 10 main groups lower.

"I think the markets are going to be very volatile for the foreseeable future. Just because you have one good day doesn't mean you have a trend. I don't see any uptrend here yet," said Douglas Davis, president at Davis-Rea.

"In order to form a market bottom, you need a lot of volatility. The market has got to make a decision as to where the bottom is. It may not have hit bottom yet. It probably has to test lower levels one more time."   Continued...