September 2, 2008 / 2:55 PM / 10 years ago

UPDATE 2-Toronto stock index sinks as resources weigh

*Price of crude sinks as Gustav fears ease

*Financials, consumer stocks rise on oil’s fall

*Couche-Tard to report first-quarter results

(Adds details)

TORONTO, Sept 2 (Reuters) - The Toronto Stock Exchange’s main index was sharply lower on Tuesday, yanked down by energy and materials stocks, as crude tumbled after Hurricane Gustav spared major U.S. Gulf oil facilities, and metal prices sagged.

The benchmark index’s key energy sector fell 5 percent as oil retreated to around $109 a barrel, fighting back from earlier lows, as fears eased over Hurricane Gustav’s wrath on U.S. Gulf oil facilities.

Materials, home to resource shares, fell 4.7 percent as U.S. gold futures tumbled 4 percent on oil’s retreat and as the U.S. dollar strengthened, while some base metals also sagged.

“In a word it is commodities,” said Keith Summers, chief investment officer at Stonegate Private Counsel. “The bear market is continuing.”

At midmorning, the S&P/TSX composite index .GSPTSE was down 236.83 points, or 1.7 percent, at 13,534.42, with five of its 10 main groups lower. The market was closed for the Labor Day holiday on Monday.

In the oil patch, EnCana Corp (ECA.TO) sank 5 percent to C$75.82 and Canadian Natural Resources (CNQ.TO) fell 5.1 percent to C$86.00

In resources, Agnico-Eagle Mines (AEM.TO) tumbled 5.6 percent to C$57.56 and Barrick Gold (ABX.TO) fell 5.4 percent to C$34.97.

But as resource shares tumbled, financials and consumer-related stocks benefited.

“Lower energy costs are a plus for everybody except the energy industry,” said Summers.

The financial services sector rose 0.6 percent with Royal Bank of Canada (RY.TO) up 2.1 percent at C$49.77.

Also on the upside, the consumer discretionary group was up 1.4 percent and industrials climbed 1.1 percent.

In company news, Alimentation Couche-Tard (ATDb.TO) climbed 3.3 percent to C$13.43 ahead of reporting its first quarter results, which are expected later on Tuesday. ($1=$1.07 Canadian) (Reporting by Jennifer Kwan; Editing by Scott Anderson)

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