March 5, 2009 / 3:43 PM / 10 years ago

CANADA STOCKS-TSX sags as energy, financials weigh

* TSX down 1.33 percent at 7,711.07

* Energy sector retreats as oil price drops

* Financials down on economic worries (Adds details, quotes)

TORONTO, March 5 (Reuters) - Toronto’s main stock index was lower on Thursday morning, as concerns about the global economic outlook pulled down energy and financial shares.

The weakness followed a big bounce in the previous session when optimism over new stimulus measures in China helped lift oil prices and energy shares.

However, on Thursday, Premier Wen Jiabao said China would ramp up deficit spending this year to hit its 8 percent growth target, but did not announce an increase in the country’s two-year economic stimulus plan. [ID:nSP395150].

“It took the wind out of the sails of the market because that was the driving force yesterday,” said Gareth Watson, Canadian equity adviser at ScotiaMcLeod’s Portfolio Advisory Group.

Investor worries also rose after General Motors (GM.N) warned about its viability, and remained cautious about the outlook for General Electric (GE.N).

“There’s not a lot of positive news to hang our hats on,” said Watson.

At 10:12 a.m., (1512 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was down 103.68 points, or 1.33 percent, at 7,711.07, with nine of its 10 main groups lower.

The big energy group sank 1.5 percent as oil prices fell to around $44 a barrel on fresh demand concerns. EnCana Corp (ECA.TO) was down 3.6 percent at C$48.48.

Financials fell 3.2 percent, with Manulife Financial <MFC.TO down 5.2 percent to C$10.34.

Materials gained 0.9 percent, boosted by gold miners , which benefited from healthier bullion prices. Goldcorp (G.TO), was up 4 percent at C$36.84.

$1=$1.28 Canadian Reporting by Jennifer Kwan; editing by Rob Wilson

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