April 8, 2009 / 2:40 PM / 9 years ago

CANADA STOCKS-TSX falls as lower oil rattles energy shares

* TSX down 17 points at 8,806.98

* Lower energy shares lead selloff

* Insurance stocks help limit slide (Adds details)

By Frank Pingue

TORONTO, April 8 (Reuters) - Toronto’s main stock index was slightly lower on Wednesday morning as lower oil prices weighed on energy shares and more than offset the boost financials got from a report of U.S. government aid for life insurers.

A drop in the price of oil further below $50 pushed the energy sector down more than 1 percent and spoiled the chance of the index rebounding after four straight lower closes.

Shares of EnCana Corp ECA.TO were down 1.7 percent at C$51.94, while Talisman Energy TLM.TO shares dropped 2.9 percent to C$14.28.

The heavily weighted financial sector rose 0.4 percent and kept the market from skidding further after a newspaper report said the U.S. Treasury plans to extend the Troubled Asset Relief Program to certain life insurers. [ID:nN07494064]

Insurer Manulife Financial MFC.TO was up 0.8 percent at C$16.29, while Sun Life Financial SLF.TO was up 2.8 percent at C$24.42.

“Financial stocks are taking an upbeat mode here off the indication that there might be more TARP money going to some insurers,” said Bruce Latimer, trader at Dundee Securities.

“But we’ve got a short week, volumes have been light the last few days and I don’t expect that to change.”

At 10:20 a.m. (1420 GMT), the S&P/TSX composite index .GSPTSE was down 17.77 points, or 0.2 percent, at 8,806.98 after straddling the break-even level for about 30 minutes after the open.

Five of its 10 sectors were lower.

The TSX will be closed on Friday for the Easter holidays and volumes are expected to ease as the week progresses.

While the TSX looked headed for a fifth straight lower close, markets watchers noted the index is still up over 17 percent from the multi-year low it plummeted to in early March.

“We had some down days in a row which is sort of a consolidation after the recent rally,” said Latimer.

Latimer also said he expects oil prices could bounce back over $50 a barrel as the summer driving months approach and demand for oil could get a boost. A turnaround in oil prices would likely lend support to the weight energy sector.

$1=$1.24 Canadian Editing by Jeffrey Hodgson

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