September 22, 2008 / 8:41 PM / 9 years ago

UPDATE 3-Toronto stocks rattled by US bailout uncertainty

3 Min Read

*TSX falls on uncertainty over U.S. bailout plan

*Worries over plan spark broad retreat

*Gold producers rally along with price of bullion

(Updates numbers, adds details, quotes)

TORONTO, Sept 22 (Reuters) - The Toronto Stock Exchange's main index tumbled more than 2 percent in choppy action on Monday in a broad retreat on uncertainty over the effectiveness of the proposed $700 billion U.S. financial bailout plan.

The lone group to make gains was the materials sector, pushed up by gold producers as bullion prices rose on the commodity's safe-haven allure and the weaker U.S. dollar. Among gainers, Goldcorp (G.TO) was up 9.8 percent at C$37.89.

But the broader market was rattled by concerns over how much the U.S. government's plan to take over sour mortgage-related debt from financial groups will help financial markets in the long term, analysts said, as well as uncertainty over the details of the plan.

In Toronto, the financial sector was down 3.7 percent, while Bank of Montreal (BMO.TO) fell 4.8 percent to C$47.53.

"I don't know if anyone's really grasped what this means, what the implications are, (and) what the long term solutions are, if any," said Adrian Mastracci, portfolio manager and president at KCM Wealth Management Inc, in Vancouver.

The S&P/TSX composite index .GSPTSE closed down 274.92 points, or 2.13 percent, at 12,638.07 with all but one of its 10 main sectors in a downturn.

The selloff comes after a stunning surge of more than 800 points on Friday on optimism over the U.S.-led moves to shore up the financial system, as well as a rally in commodities.

Monday's surge in oil prices failed to help the heavyweight energy sector as investors remained cautious over whether the gains would be sustainable. Oil spiked nearly 16 percent to settle at $120.92 a barrel as the front-month futures contract expired and the U.S. dollar weakened.

Toronto's energy sector lost 1.8 percent, while Canadian Natural Resources (CNQ.TO) was down 3.3 percent at C$84.47, and Suncor Energy gave up 5 percent to C$49.40.

BlackBerry-maker Research In Motion RIM.TO was the biggest net loser, falling 7.4 percent to C$101.39 and helping to drag the tech sector down 5.2 percent. ($1=$1.03 Canadian) (Reporting by Leah Schnurr; Editing by Peter Galloway)

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