CANADA STOCKS-Toronto drops as oil hits 17-month low

Mon Oct 27, 2008 10:07am EDT
 
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* Toronto index follows pattern of losses worldwide

* Energy issues under pressure as oil falls

TORONTO Oct 27 (Reuters) - The Toronto Stock Exchange's main index was off more than 1 percent in early dealings on Monday, falling with other stock markets around the world as recession fears heightened, and hit again by falling prices for oil and other Canadian-produced commodities.

Japan's Nikkei stock index fell to a 26-year low on Monday and equity markets elsewhere in Asia and Europe dropped on fears that further coordinated action to calm markets may not be enough to fend off a global recession. [MKTS/GLOB]

Toronto's oil and gas sector fell 3.09 percent as oil prices fell to a 17-month low below $62 a barrel. [ID:nSYD351781] The materials sector was off 1.3 percent as gold's appeal was dented by a surging U.S. dollar [ID:nLR559793].

"We're following the markets in New York and Europe and trading down because of oil," said Steve Ibel, institutional equities trader at Beacon Securities, in Halifax, Nova Scotia.

"Those two things are dragging it down a bit today but not as bad as it was last week. It's kind of a muted down day I think."

Shortly after 9:45 a.m. (1345 GMT), the S&P/TSX composite index .GSPTSE was 107.30 points, or 1.15 percent, at 9,186.79, with all but one of the index's main 10 groups all lower. The index fought back from a 2 percent drop at the open. ($1=$1.27 Canadian) (Reporting by Ka Yan Ng; Editing by Peter Galloway)