June 3, 2009 / 8:40 PM / 10 years ago

CANADA STOCKS-TSX tumbles as investors book profits

* Falls nearly 300 points points to 10,290.12

* Energy shares blamed for bulk of slide

* Index erases all of week’s early gains (Adds details, comments and official numbers)

By Frank Pingue

TORONTO, June 3 (Reuters) - Toronto’s main stock index closed sharply lower on Wednesday as a drop in oil prices rattled its weighty energy sector and opened the door to profit-taking following the market’s big climb since March.

The energy sector tumbled 4.8 percent, the biggest drop among all of the TSX’s sectors, in tandem with a retreat by oil prices from a seven-month high.

Shares of Canadian Natural Resources (CNQ.TO), the biggest drag on the index, dropped 6 percent to C$62.50, followed by EnCana Corp (ECA.TO), which shed 4.3 percent to C$59.98.

The S&P/TSX composite index .GSPTSE closed down 298.67 points, or 2.82 percent, at 10,290.12. Nine of the TSX’s 10 sectors ended lower, with the consumer discretionary group the only one to eke out a gain.

The index remains up comfortably from the five-year low hit in early March, but the latest selloff has wiped out all of the meaty gains recorded earlier this week.

“The market had been very much oversold from that March date and there was a lot of cash on the sidelines ... so in consequence the market went from being very oversold to very overbought and this is a reaction to that,” said Irwin Michael, portfolio manager at ABC Funds.

“I’d like to think we are still on track for higher prices. However, in the short run, the market needed a bit of a breather. Nothing goes straight up or straight down and I think this is a very healthy pause that investors are taking.”

$1=$1.11 Canadian Editing by Rob Wilson

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