TSX takes hit from Manulife and ends lower

Tue Dec 2, 2008 5:26pm EST
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By Frank Pingue

TORONTO (Reuters) - The Toronto Stock Exchange's main index ended a see-saw session lower on Tuesday as news that insurer Manulife Financial (MFC.TO: Quote) will issue new stock offset rallying energy shares after talk of a takeover of Nexen Inc NXY.TO.

The tug-of-war between the slumping financial shares and rallying energy stocks left the Toronto Stock Exchange bouncing around in a wide range that saw it up as much as 120 points and down as much as 186 points.

Manulife's drag on the heavily weighed financial group kept the broader index from tagging along with a sharp rally in U.S. stock markets, which managed to bounce back from a steep slide in the previous session.

"I just think there is a lack of confidence from both buyers and sellers," said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.

Manulife shares fell 2.79 percent to C$19.89 after it said it would report a fourth-quarter loss of C$1.5 billion due to sliding markets and issue $2.1 billion in common equity to bolster its capital position.

The sour mood on Manulife shares weighed on other sector heavyweights such as Sun Life Financial (SLF.TO: Quote), whose shares fell 10 percent to C$23.12, while Great-West Lifeco GWO.TO fell 6 percent to C$21.90.

After a 9.32 percent drop in the previous session, which marked the Toronto Stock Exchange's biggest percent slide in a single session since October 1987, the key index is now down 10 percent on the week.

Helping to boost the energy group in the face of lower oil prices and to cushion the broader index's slide was a report on the Financial Times website that French oil major Total SA (TOTF.PA: Quote) will make a C$19.7 billion ($15.8 billion) offer for Nexen, Canada's No. 4 independent oil explorer.   Continued...

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