May 7, 2009 / 8:39 PM / 10 years ago

CANADA STOCKS-TSX sinks as financials, resources drag

* TSX finishes down 1.74 percent at 9,967.05

* Rises early to 2009 high before easing

* Big insurers weigh on financial issues

* Energy group succumbs to oil price reversal (Updates to close, adds details, quote)

TORONTO, May 7 (Reuters) - Toronto’s main stock index retreated on Thursday after four sessions of gains as weak results from Canada’s big insurers hit financial issues, while crude oil prices pulled back from earlier highs.

The financials group, down 3.2 percent, led the broad selloff as the country’s top three insurers reported quarterly results that reflected ailing stock markets, credit impairments and the need to shore up reserves. [ID:nN07467694]

Manulife Financial (MFC.TO) fell 2.5 percent to C$22.18, while Sun Life (SLF.TO) fell 6.5 percent to C$28.00. Great-West Life (GWO.TO) tumbled 6.3 percent to C$21.45.

Banks were also under pressure, with Royal Bank of Canada (RY.TO) off 2.5 percent at C$43.89, ahead of the results of “stress tests” of major U.S. banks due at 5 p.m.

The energy group was off 1.1 percent as the price of oil CLc1 fell back from earlier gains. [ID:nSP407747] The materials group slid 0.8 percent, even as gold prices remained steady.

The S&P/TSX composite index .GSPTSE ended down 176.38 points, or 1.74 percent, at 9,967.05.

The index rallied at the open, rising close to 2 percent and touching a 2009 high of 10,340.78. But those gains faded quickly and the TSX tipped to low of 9,922.03.

While the results from insurers pressured the market, there was no major “fundamental story” to the turnaround, said Francis Campeau, broker at MF Global Canada, in Montreal.

“I think we’re seeing lots of profit-taking,” he said.

$1=$1.17 Canadian Reporting by Jennifer Kwan

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