* TSX index closes at lowest level since Nov. 20
* Energy sector skids 7.5 percent, leads market slide
* Suspension of Parliament dampens investor sentiment (Adds details)
By Frank Pingue
TORONTO, Dec 4 (Reuters) - The Toronto Stock Exchange’s main index fell to its lowest close in two weeks on Thursday as a slide in oil prices shook the resource-heavy market, while the suspension of Canada’s Parliament weighed on sentiment.
Oil prices fell more than 6 percent to their lowest level in almost four years, pulling Toronto’s heavily weighted energy sector down 7.46 percent.
A decision by Canada’s governor general to grant Prime Minister Stephen Harper’s request that Parliament be suspended until Jan. 26, amid opposition attempts to bring down his government, hurt sentiment since it likely means there will be no government plan to stimulate the economy until at least the new year.
The S&P/TSX composite index .GSPTSE closed down 239.14 points, or 2.88 percent, at 8,057.82 with seven of its 10 subindexes finishing lower.
Toronto’s key index is now down 13 percent this week after falling in four consecutive sessions, including a whopping 864-point skid on Monday.
Shares of oil company Canadian Natural Resources (CNQ.TO), which fell 13.45 percent to C$41.00, were the biggest drag on the index, followed by oil company EnCana Corp (ECA.TO), which dropped 5.79 percent to C$49.82.
“Commodity prices are weak so that was a problem,” said Tim Burt, president and chief investment officer at Cardinal Capital Management Inc in Winnipeg, Manitoba.
“And then with the government being suspended until Jan. 26 it basically means that we’re not going to get any initiative out of Ottawa to try and stimulate the economy.”
Some stimulus could come from the Bank of Canada, which is scheduled to announce its latest interest rate decision on Dec. 9. The central bank has slashed its key rate by 225 basis points since December, leaving its overnight rate at 2.25 percent.
A 2.45 percent slide by the financial sector, which makes up about third of the TSX index, was also a key driver behind the market’s latest selloff.
The drop in the financial index came after three of the four Canadian banks that reported reporting quarterly earnings on Thursday posted lower profits and offered little in the way of outlook for 2009.
Shares of Toronto-Dominion Bank (TD.TO) fell 1.36 percent to C$41.92, while National Bank shares dropped 6 percent to close at C$35.55.
Canadian Imperial Bank of Commerce (CM.TO) shares bucked the negative trend in the sector and rose 2 percent to C$46.18 after the bank reported a 51-percent drop in profit that was broadly in line with market expectations.
Canadian bank stocks could encounter more selling pressure as the slumping economy threatens to eat away at their profits heading into 2009.
“We’ve had all the banks reporting this week and I’d say on balance there were probably more disappointments than surprises on the upside, and in the current environment that should probably be expected,” said Michael Sprung, president at Sprung & Co. Investment Counsel.
“But the financial crisis that we are in is by no means over and it will continue to affect bank earnings well into next year.”
U.S. stock markets also closed lower due to the sharp slide in oil prices and disappointing profit outlooks from a number of large companies.
The Dow Jones industrial average .DJI fell 215.45 points, or 2.51 percent, to 8,376.24, while the Nasdaq Composite Index .IXIC ended down 46.82 points, or 3.14 percent, at 1,445.56.
$1=$1.28 Canadian Reporting by Frank Pingue; editing by Peter Galloway