Fears of deeper recession hits TSX
By Jennifer Kwan
TORONTO (Reuters) - Toronto's main stock index sank on Tuesday to its lowest level in seven weeks as resource issues slumped on falling oil and base metal prices, and as concerns grew over the global financial crisis.
The financial services sector led the TSX lower, closing down 6.4 percent, its steepest one-day percentage loss since the beginning of December.
Heavily weighted stocks on the downside included insurer Manulife Financial, down 10.6 percent to $15.67, and Royal Bank of Canada, which fell 5.5 percent to $28.15.
Further concerns about the financial sector were sparked after two leading agencies, including a report from Moody's Investors Service, warned about growing risks to European banks as the recession deepens.
That added to an already gloomy tone in the sector, said Francis Campeau, broker at MF Global Canada, in Montreal, adding that there appear to be "no buying catalysts".
"Going forward, we expect banks' income to decrease," he said. "Forward earnings per share are getting repriced and current dividends are unsustainable."
The energy group also pressured the TSX lower, falling 5 percent as the price of oil dropped 7 percent to below $35 a barrel on demand concerns.
EnCana Corp fell 5.2 percent to $51.30, while Suncor Energy dropped 7 percent to $22.82. Continued...