(Updates throughout with analyst comment, details, market reaction)
* TSX down 128.46 points, or 0.93 percent, to 13,736.61
* Eight of the TSX’s 10 main groups down
TORONTO, Aug 31 (Reuters) - Canada’s main stock index, coming off a rebound last week, slumped more than 1 percent on Monday as resource stocks resumed their slump on falling commodity prices.
The index, which had been steadily declining since April, sank to its lowest level since 2013 last week on investor worries over China’s economic growth. Those concerns remain, while excess crude supply also is weighing on crude prices.
“I think we’re into our period of seasonal weakness, which usually runs from mid-August to mid-October,” said Douglas Davis, chief executive officer at Davis-Rea, adding that the market has broadly risen for the last seven years without a solid correction.
“It’s way overdue. And it should go further. We need a good decline to destabilize the market and get it ready again.”
At 11:27 a.m. EDT (1527 GMT), the Toronto Stock Exchange’s S&P/TSX composite index fell 128.46 points, or 0.93 percent, to 13,736.61. At one point, it was down 1.53 percent to 13,653.87.
Financial stocks, the sector carrying the most weight on the index, also lost ground, with Royal Bank of Canada stumbling 1.9 percent to C$72.29, and Toronto-Dominion Bank giving up 1.9 percent to C$51.92. The overall group, which also recouped some of its recent losses last week on the back of forecast-topping quarterly results, retreated 1.4 percent.
“It’s interesting that the banks have been under pressure, because they are really still pretty darn solid ... the banks are becoming pretty good value,” said Davis, adding that foreign investors may be shorting bank stocks in advance of the Oct. 19 Canadian federal election. The left-leaning New Democratic Party, which vows to raise taxes on large corporations and has never won a federal election, is leading the polls.
Of the S&P/TSX composite index’s 10 main groups, eight were in negative territory. Declining issues outnumbered advancing ones on the TSX by 140 to 104, for a 1.35-to-1 ratio on the downside.
The materials group, home to mining firms, sank 1.9 percent, while energy stocks retreated 0.4 percent.
Suncor Energy Inc fell 2.0 percent to C$36.06, while Barrick Gold Corp tumbled 4.7 percent to C$9.00. (Reporting by Solarina Ho; Editing by Paul Simao)
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