TSX battered by weak resource issues

Tue Sep 2, 2008 5:32pm EDT
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By Leah Schnurr

TORONTO (Reuters) - The Toronto Stock Exchange's main index was hammered by a selloff in resources on Tuesday, plunging more than 3 percent as commodity prices fell, marking its worst day in more than seven months.

The heavyweight energy sector led the slide as oil prices slid on fading concerns over the impact from Hurricane Gustav on the U.S. oil industry.

Oil settled down $5.75 at $109.71 a barrel as reports suggested oil installations in the Gulf of Mexico had weathered the storm with only minor damage. Suncor Energy fell 9.6 percent to C$54.91.

The resource-laden materials sector also yanked the Toronto index lower, as it was hurt by falling prices of gold and other metals, which followed oil's example. Inmet Mining slid 7 percent to C$59.50.

"Gustav was supposed to be a stronger impersonation of Katrina, and it got gradually downgraded, and apparently expected damage is fairly minimal, so obviously that's hurting the energy sector," said Levente Mady, a broker at MF Global Canada in Vancouver.

The S&P/TSX composite index closed down 471.51 points, or 3.42 percent, at 13,299.74 with all 10 of its main sectors ending lower. It was the biggest one-day percentage loss since January when Bay Street was knocked down by fears over the prospects for the U.S. economy.

The energy and materials sectors, which account for more than half of the index, shed 6.5 percent and 5.9 percent, respectively.

Other laggards included Potash Corp of Saskatchewan, which fell 6.5 percent to C$172.70, while Canadian Natural Resources slumped 6.5 percent to C$84.73.   Continued...

<p>A Toronto Stock Exchange (TSX) logo is seen in Toronto in this November 9, 2007 file photo. REUTERS/Mark Blinch</p>