February 10, 2009 / 9:46 PM / 10 years ago

CANADA STOCKS-TSX pulled lower by U.S. bank plan doubts

* TSX ends down after five days of gains

* Steepest one-day percentage loss since Jan. 22

* Energy, financial sectors lead TSX lower

* Equity markets tumble as U.S. bank plan unveiled (Adds details, quote, updates figures)

TORONTO, Feb 10 (Reuters) - Toronto’s main stock index fell on Tuesday, breaking a five-day streak of gains, as energy and financial issues sank on skepticism about whether the U.S. bad-debt plan, released on Tuesday, will be sufficient to bring health back to that country’s financial system.

The energy sector, down 4.4 percent, led the TSX lower as oil dropped 5 percent to settle at $37.55 a barrel amid doubts about the bank rescue plan’s prospects for success. [ID:nSYD426207] Oil company EnCana (ECA.TO) dropped 4.4 percent to C$55.31.

The heavily weighted financial group dropped nearly 4 percent. Insurer Manulife Financial (MFC.TO) was down 5.9 percent at C$20.09, and Royal Bank of Canada (RY.TO) fell 3.5 percent to C$30.70.

“It’s a classic buy on hope, sell on reality sort of scenario,” said Elvis Picardo, analyst and strategist at Global Securities in Vancouver. “There continues to be considerable skepticism about what governments can do to combat this crisis.”

The steep selloff came as the U.S. Treasury unveiled a revamped financial rescue plan on Tuesday morning to mop up spoiled assets from banks’ books and revive consumer lending. [ID:nN102559] [ID:nN26365728]

Major U.S. stock indexes fell hard after Treasury Secretary Timothy Geithner’s announcement of the plan because, analysts said, the market had hoped for more details.

“There’s a lot of disappointment in Timothy Geithner’s speech,” Picardo said. “It was a little short on specifics.”

The S&P/TSX composite index .GSPTSE closed down 229.39 points, or 2.54 percent, at 8,817.89, with nine of its 10 main groups lower.

The drop was the index’s steepest one-day percentage loss in just over two weeks, according to Thomson Reuters data.

The resource-laden materials group was the only sector in the black, climbing 0.3 percent with the help of rising gold prices.

Miner Barrick Gold (ABX.TO) rose 0.8 percent to close at C$46.19, while Agnico Eagle (AEM.TO) climbed 2.3 percent to C$66.00.

$1=$1.25 Canadian Reporting by Jennifer Kwan; editing by Peter Galloway

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