November 5, 2008 / 9:55 PM / 10 years ago

CANADA STOCKS-Commodity demand worries pull TSX down

*TSX focuses on economy after historic U.S. election

*Energy stocks sink 3.5 pct as oil falls to $65.30/barrel

*Agrium shares up 0.4 pct as profit tops expectations

(Adds official closing numbers, quote, details

TORONTO, Nov 5 (Reuters) - The Toronto Stock Exchange’s main index closed lower on Wednesday as oil and mining shares fell as commodity prices dropped on worries that demand is slowing due to a faltering world economy.

Major drags on the benchmark included Potash Corp of Saskatchewan POT.TO, down 5.5 percent at C$102.00, Royal Bank of Canada (RY.TO), which sank 1.9 percent to C$46.71, and Canadian Natural Resources (CNQ.TO), 3.7 percent lower at C$60.41.

The index’s energy and base-metals groups sank 3.5 percent and 7.9 percent, respectively, as commodities prices slumped as stock markets returned their gaze to the faltering global economy after rising on Tuesday in anticipation of Barack Obama’s victory in the U.S. presidential election. [ID:nL5544119]

“It’s sort of the old adage buy on rumor and sell on news,” said Peter Chandler, senior vice-president at Canaccord Capital in Waterloo, Ontario.

“Now the market goes back and starts to focus on the economy and some of the economic figures and they’re slow, they’re weak, they’re anemic at best. So too are the corporate earnings and, more importantly, the outlook corporations are providing looking forward for the next several quarters.”

The S&P/TSX composite index .GSPTSE closed down 229.38 points, or 2.27 percent, at 9,887.20, with all but one of its 10 main groups lower. The health care group was up 0.16 percent.

The retreat follows a 4 percent rise on the key index on Tuesday and a 5 percent rise last week.

The price of oil settled down $5.23 at $65.30 a barrel on demand concerns after a U.S. government report showed rising fuel stockpiles [ID:nSYD424660], while gold and base metals prices fell on a firmer U.S. dollar. [ID:nL5296700]

Despite the slump in the gold price, miner Goldcorp (G.TO) rose 6.2 percent to C$26.78, and Barrick Gold (ABX.TO) climbed 1.4 percent to C$29.36.

The overall materials group was down 1.9 percent, but fertilizer producer Agrium Inc AGU.TO rose 0.4 percent to C$46.18 after it reported a quarterly profit that topped analysts’ expectations. [ID:nN04258936]

Third-quarter profit at Enbridge Inc (ENB.TO) nearly doubled [ID:nN05262137] but shares of Canada’s No. 2 pipeline company were down 0.7 percent at C$42.00 ($1=$1.17 Canadian) (Reporting by Jennifer Kwan; Editing by Peter Galloway)

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