Toronto stocks fall, but snap back from big loss

Thu Oct 16, 2008 5:24pm EDT
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By Jennifer Kwan

TORONTO (Reuters) - The Toronto Stock Exchange's main index fought back from a 560-point loss on Thursday to close only moderately lower as bargain-hunting took hold.

In erratic dealings, the TSX seesawed in a trading range of 670 points from peak to trough and in the end extended Wednesday's steep losses only slightly.

Gavin Graham, director of investments at BMO Asset Management, said the early selloff was based on fears that a recession in the United States and Europe could be a "pretty bad one".

"You could actually make the argument that this sort of revisiting of the lows we saw last week is a lot more justified in that it's being down on economic fundamentals as opposed to worries that the entire world financial system is going to seize up," he said.

The S&P/TSX composite index closed down 53.88 points, or 0.58 percent, at 9,269.97, with half of its 10 main groups lower. Earlier in the day the index tumbled 562.83 points, or 6 percent, to 8,761.02, its lowest level since November 2004.

The composite index has been on a roller-coaster ride, surging 9.8 percent earlier this week after falling 16 percent last week. It is down 26 percent since Sept 25.

Thursday's early selloff was linked to tumbles in commodity prices, said Peter Gibson, market strategist at Desjardins Securities.

"At the end of the day people were doing some bargain-hunting," he said.   Continued...

<p>A Bay Street sign is seen at the financial district in Toronto, October 10, 2008. REUTERS/Mark Blinch</p>