Toronto stocks dive as commodities retreat

Thu Oct 2, 2008 5:18pm EDT
 
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By Wojtek Dabrowski

TORONTO (Reuters) - The Toronto Stock Exchange's main index fell nearly 7 percent on Thursday to its lowest level in more than two years, battered by concerns over the outlook for fertilizer producers and a drop in oil and gold prices.

The plunge in shares of big fertilizer producers Potash Corp of Saskatchewan and Agrium Inc came amid worries that the U.S. credit crisis could hamper farmers' ability to get cash for next year's planting season. It marked the latest in a series of shock waves emanating from Wall Street's turmoil and the related slowdown in the global economy.

"It's really brutal out there," said Sal Masionis, a stockbroker at Brant Securities. "The most important thing is the tightness in the money market and the capital markets as a whole."

The S&P/TSX composite index plunged 813.97 points, or 6.95 percent, to 10,900.54.

The S&P/TSX 60 index of Canadian blue chips shed 7.45 percent to end at 651.34.

All but one of the composite's 10 main subgroups fell, including the powerful energy and materials groups, which shed 8.55 percent and 17.2 percent, respectively.

Potash Corp and Agrium, two of the main movers that powered the Toronto market during the commodities boom, dropped more than 20 percent each after Merrill Lynch downgraded the stocks because of uncertainty over earnings for the fertilizer sector.

Potash gave up 26 percent to close at C$101, while Agrium fell 23 percent to finish at C$45.01.   Continued...

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