January 14, 2009 / 4:37 PM / 10 years ago

CANADA STOCKS-TSX hits 2009 low amid profit fears, Nortel sinks

* All 10 TSX sectors pinned lower, financials lead skid

* Lower oil prices contribute to index’s latest slide

* Nortel Networks shares plunge nearly 80 percent (Add details)

By Frank Pingue

TORONTO, Jan 14 (Reuters) - Toronto’s main stock index fell nearly 4 percent by late morning on Wednesday as concerns about upcoming corporate earnings weighed on sentiment, while Nortel Networks Corp NT.TO shares got hammered on news that it filed for bankruptcy protection.

Heavyweight financial and energy shares were the key drivers behind the slide in the index, which relinquished all of Tuesday’s 168 point gain minutes after the open.

“People are just reluctant to invest in this environment,” said Bruce Latimer, a trader at Dundee Securities. Right now there are just not a lot of reasons for people to jump in the market, especially if they are people who have done it previously and it didn’t work in their favor.”

The financial services sector, which accounts for about 33 percent of the index and includes shares of Canadian banks and insurance companies, was down 4 percent.

Shares of Royal Bank of Canada (RY.TO), the biggest drag on the key Toronto index at midmorning, were down nearly 5 percent at C$34.13, while Toronto-Dominion Bank (TD.TO) shares were down 3.6 percent at C$43.83.

At 11:20 a.m. (1620 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was down 304.96 points, or 3.4 percent, at 8,656.59. Earlier, it fell to 8608.63, a loss of 3.9 percent that marked its lowest level since Dec. 30.

After charging out of the gate in 2009 with a string of solid gains that had the index up 5.76 percent last week, a few losing sessions, mostly at the hand of lower oil prices, have left the market down 4 percent on the year.

Nortel shares, easily the most active issue on the index, fell as much as 79 percent to 8 Canadian cents as investors reacted to news ahead of the market open that the company had filed for bankruptcy protection. [ID:nN14442895]

A turnaround in oil prices was enough to convince investors to pocket some recent gains recorded by the energy sector. Oil prices slipped back to around $38 a barrel on nagging concerns about demand given the weak state of the global economy.

That left crude prices more than $100 below the record highs above $147 a barrel seen in July.

Suncor Energy (SU.TO) shares fell 5.8 percent to C$25.87, while EnCana Corp (ECA.TO) shares were down 2.5 percent at C$55.66.

$1=$1.24 Canadian Editing by Jeffrey Hodgson

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