TSX suffers biggest net drop ever

Mon Dec 1, 2008 5:53pm EST
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By Cameron French

TORONTO (Reuters) - Toronto's main stock index tumbled 864 points on Monday, its deepest net drop ever, as sliding commodity prices, gloomy U.S. economic news and the urge to take profits after six straight days of gains prompted a sell-off that hit every market sector.

Resource issues led the market lower as OPEC's deferral of any new oil supply cuts stung energy shares. U.S. crude sank $5.15 to $49.28 a barrel, its lowest settlement since May 2005.

Materials stocks were undercut by falling gold prices and in increasingly gloomy economic view.

Data showing Canada's economy grew at a faster-than-expected 1.3 percent in the third quarter was ignored in the face of a report showing falling U.S. factory activity. Even more disturbing was a declaration from the U.S. National Bureau of Economic Research that the United States has been in recession since December 2007.

"We were coming off a pretty decent run last week, but no such luck (today)," said Elvis Picardo, analyst and strategist at Global Securities in Vancouver.

"There's so much concern about what the global economy's doing, and there this big massive sell-off in commodity prices."

The S&P/TSX composite index fell 864.41 points, or 9.3 percent, to 8406.21. The drop eclipsed an 840.93 point drop on September 29, 2008. The percentage decline was the second biggest ever.

All 10 TSX subgroups fell, with materials issues dropping 13.7 percent, and energy stocks falling 13.3 percent.   Continued...

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