CANADA STOCKS-Oils, financials drive TSX sharply lower

Thu Jan 22, 2009 5:05pm EST
 
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* Financials slump, Manulife biggest influence on downside

* Late oil price rise fails to lift energy issues

* TSX retreat follows Wednesday's 3 percent gain

* Potash gains, but forecasts weaker than expected (Adds details, analyst comment, updates to closing prices)

By Ka Yan Ng

TORONTO, Jan 22 (Reuters) - Toronto's main stock index slumped more than 3 percent on Thursday, driven lower by weakness in energy and financial shares, while economic news reinforced a sour tone.

The energy sector led the broad decline as the price of oil, a key Canadian export, turned lower as a U.S. government report showed crude supplies rose more than expected. Although the price recovered on U.S. stimulus hopes, shares of most Canadian oil companies remained in negative territory.

Financial issues were another big drag on the overall index, partly because of ongoing concerns about the health of the global financial system.

Among the key stocks falling were EnCana Corp ECA.TO ECA.TO, Canada's biggest energy company, which was down 4.5 percent at C$52.75, and insurer Manulife Financial MFC.TO, which fell 11.7 percent to C$19.10.   Continued...