CANADA STOCKS-Toronto index expected to tumble at open

Fri Oct 24, 2008 9:11am EDT
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By Ka Yan Ng

TORONTO Oct 24 (Reuters) - The Toronto Stock Exchange's main index .GSPTSE is poised to tumble on Friday as part of a wave of sharp drops on equity markets worldwide as recession fears gained momentum.

The resource-rich index will likely show steep declines at the open as commodity prices slid further.

Major stock markets around the world sank as panicked investors moved to the safety of government debt and the U.S. dollar and Japanese yen. [MKTS/GLOB] Britain's top share index dropped 7 percent by midday in London, while Japan's Nikkei average closed 9.6 percent lower.

U.S. stock index futures tumbled so sharply that they had to be frozen at several points, but the New York Stock Exchange and Nasdaq said trading would open as normal at 9:30 a.m. (1330 GMT) [ID:nN24505205]

"Canada should get hit a fair bit more because gold is down, oil is down, copper is down, every commodity is down again today quite aggressively so I think you are probably going to see a much worse effect in Canada than you would in the U.S.," said Paul Harris, portfolio manager at Avenue Investment Management.

"I think people are coming to grips with the fact that you are going into a global recession and I think that it can be a consumer-led recession which I think is much worse than any other recession you'll ever have."

Energy issues will likely also get knocked down hard on the Toronto exchange as the price of oil continues to slide. An emergency OPEC meeting resulted in a swift agreement to cut production as a first step towards halting an oil price slide [ID:nLO735433] but has so far done little to stem the drop.

It was just above $63 a barrel, down more than 50 percent since it hit a record above $147 a barrel in the summer.   Continued...