CANADA STOCKS-European credit downgrades drive TSX lower

Tue Apr 27, 2010 5:20pm EDT
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* TSX down 1.09 percent at 12,146.74

* Heavily weighted banks and energy groups fall

* S&P cuts Greek debt to junk, downgrades Portugal (Adds details, updates closing numbers)

By Cameron French

TORONTO, April 27 (Reuters) - Toronto's main stock index fell from a 19-month high on Tuesday as investors bailed out of stocks across all industry groups after credit ratings for Greece and Portugal were slashed.

Heavily weighted financial shares slid 1.46 percent, while energy issues dropped 1.83 percent as the downgrades sparked a flight-to-safety U.S. dollar rally that pressured commodity prices.

Bank stocks were led downward by Canadian Imperial Bank of Commerce (CM.TO: Quote), which fell 2 percent to C$75.43, while Manulife Financial (MFC.TO: Quote) retreated 1.8 percent to C$18.94. Energy issues were pulled down by Nexen Inc NXY.TO, which fell 4.1 percent to C$25.42.

Ratings agency Standard & Poor's downgraded Greek ratings to junk status on concerns about its ability to implement the reforms needed to address its high debt burden. [ID:nLDE63P0LU]

It also cut the rating on Portugal by two notches to A-minus, four levels above speculative, because of concerns about the country's ability to deal with high debt levels.   Continued...