Weak resources help pummel TSX

Tue Jun 24, 2008 5:15pm EDT
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By Leah Schnurr

TORONTO (Reuters) - The Toronto Stock Exchange's main index shed nearly 2 percent on Tuesday, dragged down by skidding resource issues amid investor concerns over the long-term prospects for oil demand.

A see-saw session for crude prices provided scant support for the benchmark, as oil finally settled up 26 cents at $137.00 a barrel amid worries over supply disruptions in Nigeria and increasing tensions between Israel and Iran.

On Bay Street, the energy sector tumbled 3.2 percent, with Canadian Natural Resources falling C$3.60, or 3.5 percent, to C$100.10 and Suncor Energy down C$3.67, or 5.7 percent, at C$61.31.

"I think the anticipation is that there will be some sort of drop in demand," said Adrian Mastracci, portfolio manager and president of KCM Wealth Management Inc. in Vancouver.

Mastracci also noted that there is still a disconnect between energy stocks and the price of oil, as the sector's shares have not risen as quickly, or as high as the commodity.

The S&P/TSX composite index closed down 282.22 points, or 1.92 percent, at 14,409.60 with all 10 of its main sectors lower. It was the biggest drop since mid-March.

The materials sector was down 2.1 percent. Potash Corp of Saskatchewan was the biggest net loser, down C$9.90, or 4.1 percent, at C$229.99. Fellow fertilizer producer Agrium fell C$5.48, or 4.8 percent, to C$108.60.

Lex Kerkovius, senior research analyst at McLean & Partners Wealth Management Ltd. in Calgary, said that people are becoming doubtful as to whether high oil prices can last.   Continued...

<p>People attend a market open ceremony for the Toronto Stock Exchange at the TSX Broadcast Centre in Toronto June 20, 2008. REUTERS/Mark Blinch</p>