July 29, 2009 / 9:13 PM / 8 years ago

CANADA STOCKS-TSX slides for 2nd day as oil price tumbles

* TSX down 1.1 percent at 10,455.33

* Energy leads fall on biggest oil price drop since April

* Six of TSX’s 10 main sectors end lower (Adds details and comments, closing stock prices)

By Ka Yan Ng

TORONTO, July 29 (Reuters) - Toronto’s main stock index fell for a second day in a row on Wednesday as oil and gold prices tumbled and U.S. data added to fears of a weak economic recovery.

The energy sector, which accounts for about 22 percent of the TSX index, was the biggest drag, falling 2.77 percent after U.S. data showed an unexpected rise in crude inventories, which triggered the biggest slide in the price of oil since April. [ID:nSP480296]

Suncor Energy (SU.TO) was the biggest influential decliner, shedding 4.1 percent to C$33.32, while Canadian Natural Resources (CNQ.TO) was not far behind with a 2.74 percent drop to C$61.75.

Talisman Energy TLM.TO fell 4.8 percent to C$16.27, following the general direction of the broader market, after it reported an 85 percent drop in second-quarter profit. [ID:nBNG454712]

Another key strain on the index came from the mining-laden materials sector, which fell 1.74 percent, hurt by a dive in prices for gold and other base metals.

Teck Resources TCKb.TO fell 3.98 percent to C$25.32, while Barrick Gold Corp (ABX.TO) was 1.41 percent at C$35.75.

“I‘m actually surprised the TSX is not down even more than it is given that crude oil is off more than $4 on the day,” said Elvis Picardo, analyst and strategist at Global Securities in Vancouver, British Columbia. “It does speak to the resiliency of the market and I also think volumes are a little light.”

He described the selloff as “orderly, not panicky.”

“The theme certainly in recent weeks has been buying on the dips. You’ve seen buying coming in when the markets decline significantly. That’s helping to put some sort of a floor in this market,” Picardo said.

The TSX pared its losses late in the session as the heavily weighted financials clawed back, ending the session down 0.5 percent on a turnaround in big banking stocks such as Royal Bank of Canada (RY.TO), up 0.7 percent at C$50.96, and Canadian Imperial Bank of Commerce (CM.TO), up 0.89 percent at C$65.58.

The S&P/TSX composite index .GSPTSE finished down 115.21 points, or 1.1 percent, at 10,455.33. Six of the 10 main TSX sectors were lower.

It was a similar scene on Wall Street where U.S. stocks slipped as a steep drop in U.S durable goods orders last month underscored fears of more economic weakness. [ID:nN29173590]

The drop on the TSX did not draw concern from market experts since it came days after the index touched its highest in nearly 10 months. The TSX is still up about 40 percent from the five-year low it hit in early March.

“Markets on both side of the border are probably due for a slight pullback since they’ve basically been going full tilt since the beginning of March,” said Steve Ibel, institutional equities trader at Beacon Securities, in Halifax, Nova Scotia.

$1=$1.09 Canadian Editing by Frank McGurty

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