Toronto stocks dive amid confidence crisis

Thu Oct 9, 2008 5:01pm EDT
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By Wojtek Dabrowski

TORONTO (Reuters) - The main index of the Toronto Stock Exchange plunged almost 5 percent on Thursday as mounting gloom over the state of the economy and the U.S. financial sector sent investors fleeing the market in a broad rout.

The financial sector was the biggest drag on the benchmark, sliding 7.74 percent. The energy and materials groups -- the other two pillars that buttress the Toronto market -- failed to lend support, shedding 5.03 percent and 2.47 percent, respectively.

It was the latest in a string of sessions in which the index has seesawed higher and lower before settling deep in the red. The depressed climate signals investors are doubtful that recent moves by authorities around the world to resuscitate the credit markets will be enough to avoid a recession.

"This is a continuing loss of confidence," said Adrian Mastracci, portfolio manager and president at KCM Wealth Management Inc. "It's like the parachute's not opening."

The S&P/TSX composite index fell 456.13 points, or 4.54 percent, to close at 9,600.18.

The S&P/TSX 60 index of Canadian blue chips fell 5.05 percent to 580.56.

All but one of the 10 main subgroups of the main index moved lower. Utilities eked out a gain of 0.06 percent.

"We've got this big flood ... and it doesn't matter whether you're a financial, doesn't matter if you're an oil or a commodity, you're just in the way and you just get swept up in it," Mastracci said.   Continued...

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