TORONTO (Reuters) - The Toronto Stock Exchange’s main index dropped more than 1 percent on Thursday, led down by a retreat in the heavily-weighted financial sector and a 13 percent slide by tech giant Research In Motion RIM.TO.
The S&P/TSX composite index .GSPTSE fell 148.99 points, or 1.03 percent, to close at 14,292.14.
All of the major banks fell, caught up in concerns over the outlook for U.S. financials after Goldman Sachs said there could be deep second-quarter losses and writedowns at Citigroup (C.N) and Merrill Lynch & Co MER.N.
“There’s a continued concern that many of the banks still have some writeoffs to be taken care of,” said Brian Pow, vice president of research and equity analyst at Acumen Capital Partners, in Calgary, Alberta.
“I think people felt the risk premium on them probably a little bit higher than what was deserved on the price.”
All told, the financials subgroup dropped 2.49 percent as seven of the 10 TSX sectors took a loss on the day.
The tech sector dropped 4.82 percent, weighed down by BlackBerry-maker Research In Motion, which disappointed the market with the profit outlook it released late on Wednesday.
The stock, the largest on the TSX, fell a steep C$18.86, or 13.1 percent, to C$125.14.
“They did a fabulous job of growing earnings, but (the outlook) missed expectations, and expectations are unfortunately everything in this business,” said Andrew Martyn, portfolio manager at Davis-Rea in Toronto.
Shares of Biovail Corp BVF.TO dropped 60 Canadian cents, or 5.5 percent, to C$10.25 amid uncertainty about the growth prospects of the biotech company and concern over more legal wrangling over a leadership challenge.
The only TSX sector to make notable gains was materials, which climbed 2.61 percent as a 3.7 rise in gold prices boosted gold miners such as Kinross Gold (K.TO), up C$2.51, or 16.9 percent, at C$22.70, and Eldorado Gold (ELD.TO), which rose 89 Canadian cents, or 12.2 percent, to C$8.16.
With interest rates seen unlikely to fall any further in both Canada and the United States, and oil prices raising the likelihood of more U.S. economic hardship, Martyn said energy and gold-mining issues would likely be the few bright spots in the market over the summer.
“I‘m seeing general malaise out there, I think we’ve got a real tough eight weeks in front of us,” he said.
In New York, the Dow Jones industrial average .DJI fell 358.41 points, or 3.03 percent, to finish at 11,453.42, while the Nasdaq composite index .IXIC tumbled 79.89 points, or 3.33 percent, to 2,321.37.
In Toronto, the blue-chip S&P/TSX 60 index eased 9.95 points, or 1.15 percent, to 852.01.
All told, 396.7 million shares were traded on the Toronto Stock Exchange, with a total value of C$8.6 billion. The number of declining issues outnumbered advancers 1,064 to 550.
Reporting by Cameron French; Editing by Peter Galloway