November 6, 2008 / 5:15 PM / 10 years ago

CANADA STOCKS-TSX sags 4 pct, Canadian Natural weighs

* Energy issues lead index lower, oil below $61

* Canadian Natural falls 12 pct as project costs rise

* Rate cuts overseas fail to buoy sentiment

TORONTO, Nov 6 (Reuters) - The Toronto Stock Exchange’s main index .GSPTSE sank 3.7 percent on Thursday morning as energy issues fell along with the price of oil, and as interest rate cuts overseas failed to buoy investor sentiment.

The oil and gas sector dropped 6.6 percent as the price of oil accelerated lower to around $61 a barrel after the Bank of England cut its main interest rate by an unprecedented 150 basis points. European Central Bank and Swiss rates were also chopped on Thursday. [ID:nSYD166191]

Canadian Natural Resources (CNQ.TO) was among the top net decliners, falling 12.1 percent to C$53.12 as its quarterly profit quadrupled on the back of higher oil prices but it said that costs for its big Horizon oil sands project are rising. [ID:nBNG401176]

The materials group was pulled 6.7 percent lower even as commodity prices firmed, including gold XAU=, which rose to session highs [ID:nL652768].

Fears that demand for commodities is slowing due to a faltering world economy have pressured resource issues lower in recent months.

Kinross Gold (K.TO) lost 2.2 percent as its profit jumped 64 percent on stronger gold prices and higher production, while Iamgold (IMG.TO) fell 2.5 percent as it reported a decrease in quarterly results.

Shortly after 11:50 a.m., the S&P/TSX composite index .GSPTSE was down 361.74 points, or 3.7 percent, at 9,525.46. The losses add to the Wednesday’s commodity-driven drop. All 10 of the index’s main sectors were in the red.

“There are so many crosscurrents,” said Sal Masionis, stockbroker at Brant Securities, noting that jitters over the state of the economy, the global financial system, and corporate outlook are constant pressures on investor sentiment.

“This is the choppiness in the market. We still don’t know which way we’re going. There still probably may be a test of the bottom again before we start going up,” Masionis said.

The financial group fell 1.4 percent as brokerages Canaccord Capital CCI.TO and GMP Capital Trust GMP_u.TO both reported weaker quarterly results, hammered by poor capital market conditions.

Canaccord sagged 11 percent to C$5.65 as it swung to a quarterly loss and suspended its dividend, while GMP Capital lost 1.6 percent as its profit dropped 82 percent and it announced job cuts. [ID:nN06412806]

But Manulife Financial (MFC.TO) headed in the opposite direction as investors were relieved the insurer was able to get a C$3 billion loan to enhance its overall capital position. Manulife, which also reported lower profit, was up 1.2 percent at C$26.10. [ID:nN06299759]

A pair of warnings from the biotech sector did not dampen either Biovail BVF.TO or Angiotech ANP.TO. Biovail was up 6 Canadian cents at C$10.75 as it reported a lower profit and also warned that the hangover from its restructuring would linger for the next few quarters. [ID:nN06281944]

Angiotech Pharmaceuticals ANP.TO reported a loss and warned there was “no assurance” it will have adequate liquidity to satisfy its financial obligations next year and beyond. [ID:nWNAB9137] It stock rose 1 Canadian cent to 38 Canadian cents. (Reporting by Ka Yan Ng and Jennifer Kwan; editing by Rob Wilson)

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