February 5, 2008 / 5:12 PM / 11 years ago

UPDATE 2-Resources, recession fears weigh on Toronto stocks

(Updates numbers, adds details, quotes)

TORONTO, Feb 5 (Reuters) - The Toronto Stock Exchange’s main index extended its slide on Tuesday, falling 200 points amid weak resource issues and new data that deepened fears of a U.S. recession.

In its biggest decline in two weeks, the benchmark index was hit by U.S. data from the Institute for Supply Management that underlined worries that the impact of the U.S. housing slump was infecting the larger economy.

The prospect of a U.S. recession put further downward pressure on crude prices and Toronto’s energy sector, which led the decline, falling 1.8 percent.

“It’s predominantly the ISM number, which I guess is kind of old news in a way. Given all the other news that’s been coming, we knew we were heading toward some confirmatory numbers that showed a rapid slowing,” said Paul Hand, managing director at RBC Capital Markets.

Still, “they’re taking it pretty badly at the moment on both sides of the border,” Hand said.

The S&P/TSX composite index .GSPTSE was down 202.16 points, or 1.52 percent, at 13,056.00 with all but two of its 10 main sectors lower.

In the energy group, Canadian Natural Resources (CNQ.TO) was down C$1.76, or 2.7 percent, at C$64.50, while Suncor Energy (SU.TO) lost C$2.67, or 2.8 percent, to C$93.31.

The price of gold was also hurt by the decline in U.S. stocks, which helped push the resource-laden materials sector down 1.5 percent. The subindex of gold producers was off 0.8 percent.

Centerra Gold (CG.TO) fell 79 Canadian cents, or 5.2 percent, to C$14.53 amid reports that Kyrgyzstan had begun a tax-evasion probe into its Kumtor mine in the central Asian country.

The financials sector rounded out the three biggest groups on the index, falling 1.6 percent. Bank of Montreal (BMO.TO) retreated C$1.35, or 2.3 percent, to C$56.80, and Canadian Imperial Bank of Commerce (CM.TO) lost C$1.38, or 1.9 percent, to C$70.26.

On the upside, Shoppers Drug Mart SC.TO, Canada’s largest pharmacy chain, was up C$2.24, or 4.7 percent, at C$49.76 shortly after reporting a 16 percent increase in fourth-quarter profit.

$1=$1.00 Canadian Reporting by Leah Schnurr; editing by Rob Wilson

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