July 2, 2008 / 1:02 PM / 11 years ago

Toronto stocks plunge broadly, coal firms take hit

TORONTO (Reuters) - The Toronto Stock Exchange’s main index plunged more than 400 points in a broad selloff on Wednesday as economic sentiment darkened and coal companies saw their shares plunge alongside the price of the commodity.

People attend a market open ceremony for the Toronto Stock Exchange at the TSX Broadcast Centre in Toronto June 20, 2008. REUTERS/Mark Blinch

After jumping some 100 points at the open, the index lost its footing and began declining sharply as each of its 10 main subgroups gave up ground.

Energy and materials shares, two key pillars of the S&P/TSX composite index .GSPTSE, lost 3.07 percent and 4.8 percent respectively. Financials shed 2.16 percent.

The selloff came as a report in the United States found that U.S. private-sector employers slashed 79,000 jobs in June — the largest drop since November 2002 and worse than expected by economists.

“People are nervous,” said Julie Brough, vice president at Morgan Meighen & Associates. “It’s really hard to find positives right now and it’s making people sell.”

The S&P/TSX composite fell 432.92 points, or 2.99 percent, to close at 14,034.11.

The S&P/TSX 60 index of Canadian blue chip stocks fell 27.66 points to end at 835.53.

Some of the biggest gainers in recent months became the day’s biggest losers. Investor darling Potash Corp POT.TO, for instance, fell C$19.77, or 8.4 percent, to close at C$216.80.

Shares of gold and oil producers were also hit hard after posting a consistently robust performance in recent months.

Suncor Energy (SU.TO) fell C$2.85, or 4.8 percent, to finish at C$56.35. Agnico-Eagle Mines (AEM.TO) shed C$1.90, or 2.5 percent, to C$74.59.

“With the good gains we saw in the first half of the year, I think you’ve got some profit-taking but also some worries about how much longer can these high commodity prices go on,” said Kate Warne, Canadian market strategist at Edward Jones in St. Louis, Missouri.

Coal producers fell hard as coal prices plunged in Europe and the United States. Units of Fording Canadian Coal Trust FDG_u.TO, which owns the majority of the Elk Valley Partnership — the world’s No. 2 exporter of metallurgical coal — fell C$15.80, or 16.2 percent, to close at C$81.70.

In the United States, the Dow Jones industrial average .DJI dropped 166.75 points, or 1.46 percent, to close at 11,215.51. The tech-heavy Nasdaq fell 53.51 points to end at 2,251.46.

($1=$1.01 Canadian)

Reporting by Wojtek Dabrowski; Editing by Peter Galloway

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