(Adds details, background, analyst comments)
By Natalie Armstrong
TORONTO, March 6 (Reuters) - The Toronto Stock exchange’s main index lost more than 200 points on Thursday, weighed down by credit market concerns and profit-taking in commodities.
The S&P/TSX composite index .GSPTSE closed down 242.88 points, or 1.8 percent, at 13,360.44.
All of the TSX index’s 10 main groups were lower, led by the financial sector which dropped 3.4 percent.
Bank of Montreal BMO.TO sank C$3.05, or 6.8 percent, to close at C$41.97, battered by worries over the bank’s structured-credit investments and higher provisions on loan losses announced earlier this week.
Toronto-Dominion Bank TD.TO fell C$2.25, or 4 percent, to end at C$62.04.
“The mood from the U.S. economic data, the writeoffs and the credit situations, really unfortunately are still signaling troubling times ahead,” Vincent Delisle, strategist at Scotia Capital in Montreal, told Reuters.
“This market will not engage in a sustainable rally until credit situations, until financial sentiment improves, and unfortunately we know we’re not there yet.”
Meanwhile, investors took profits in energy and the materials subgroups, which both ended 1 percent lower.
Oil hit another record high near $106 on the weak U.S. dollar and a move by OPEC to hold crude output steady, while gold retreated from a record high a day earlier.
Nexen Inc. NXY.TO was down 78 Canadian cents, or 2.4 percent, to close at C$31.54 while Talisman Energy TLM.TO ended the day down 25 Canadian cents, or 1.4 percent, at C$17.37.
The gold producers subindex, part of the materials group, dropped 0.8 percent while the mining subindex fell by 1.2 percent.
Yamana Gold Inc. YRI.TO dropped 30 Canadian cents, or 1.6 percent, to close at C$18.75 while Kinross Gold K.TO fell 6 Canadian cents, or 0.2 percent, to end at C$25.99.
Market volume was 518.6 million shares worth C$7.3 billion. Decliners outpaced advancers 1,090 to 508. The blue chip S&P/TSX 60 index .TSE60 closed 15.03 points lower, or 1.9 percent, at 784.53.
“The biggest thing is the anxiety, angst and concern about a deeper cut in economic activity south of the border,” Peter Chandler, senior vice-president at Canaccord Capital in Waterloo, Ontario, told Reuters.
“It’s hitting our financials big time.”
On Wall Street, stocks fell on more recession fears and on new credit market worries, including the default of lender Thornburg Mortgage Inc TMA.N, amid data on poor retail sales and record high U.S. mortgage foreclosures.
The Dow Jones industrial average .DJI sagged 214.60 points, or 1.8 percent, to 12,040.39, while the Nasdaq composite index .IXIC ended down 52.31 points, or 2.3 percent, at 2,220.50.
Chandler said the troubled U.S. housing and mortgage markets were “just endemic of the sagging state of the U.S. economy overall,” and warned the effects were starting to spill across into Canada.
“There is a good part to our economy ... we are still in a secular bull market in a lot of hard assets -- oil is over $100, gold is knocking on $1,000, base metals are very strong,” Chandler said.
He added that there’s a belief that the next couple of quarters aren’t going to bring any huge relief: “That’s an excuse for the market to sell off, and it is.” (Reporting by Natalie Armstrong; Editing by Rob Wilson)