* TSX down 242.14 points, or 1.74 percent, at 13,692.37
* All 10 sectors fall
* Analysts say Conservative election win offers stability (Updates to market close with details, comments)
By Solarina Ho
TORONTO, May 3 (Reuters) - Toronto’s main stock index plunged to a two-week low on Tuesday as falling commodity prices drove resource shares deep into negative territory.
The drop in the index mirrored a slide on stock markets worldwide .MIWD00000PUS and these global factors largely overshadowed the solid victory of the business-friendly Conservatives in Monday’s Canadian election.
“Let’s face it, our equity markets, for the most part ... it all comes down to what these commodity prices are doing. Today, I think that’s taken over as the story,” said Gareth Watson, vice president, investment management and research, at Richardson GMP.
The energy and materials groups -- which combined make up about 50 percent of the index -- fell more than 2.7 percent each, as a strengthening U.S. dollar sapped investor appetite for commodities. Most commodities are priced in U.S. dollars. [GOL/][IO/R]
Suncor Energy (SU.TO) sank 5.59 percent to C$41.55, and was the index’s heaviest decliner even though the country’s biggest energy company reported a higher quarterly profit on Tuesday. Its drag on the index was nearly three times more than the next biggest decliner, Potash Corp (POT.TO), which was off 3.11 percent at C$51.46.[ID:nL3E7G312N]
Crude oil prices had their biggest single-day percentage loss in three weeks on Tuesday as global demand worries and the U.S. dollar’s strength sparked a sell-off. [O/R]
Goldcorp (G.TO) fell 2.85 percent to C$48.69, while Barrick Gold (ABX.TO) lost 2.1 percent to C$46.25 as gold prices dropped from record highs above $1,570 an ounce on waning safe-haven buying. Silver prices also had their biggest two-day loss since December 2008.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed 242.14 points, or 1.74 percent, lower at 13,692.37. All of its 10 main index groups fell.
In the afternoon, the benchmark dropped more than 2 percent to as low as 13,618.76, its lowest point since April 18.
Manulife Financial (MFC.TO) fell 4 percent to C$16.80 to help push down the index’s financial group 1.06 percent.
Francis Campeau, broker at MF Global Canada in Montreal, said the Conservative victory in Monday’s election will offer the market long-term stability.
The business-friendly party, which has formed a minority government since 2006, now has a clear majority mandate to govern for four years.
“By (the Conservatives) getting a clear majority in the Parliament, markets are able to handicap investment opportunities better,” said Stephen Wood, chief investment strategist for North America at Russell Investments in New York.
($1=$0.95 Canadian) (Additional reporting by Ka Yan Ng; editing by Peter Galloway)