March 14, 2008 / 8:34 PM / 11 years ago

UPDATE 2-Toronto stocks tumble on latest credit worries

(Updates with official closing numbers, adds details, quotes)

TORONTO, March 14 (Reuters) - The Toronto Stock Exchange’s main index skidded almost 200 points on Friday in a broad selloff as the banking sector was battered by fresh worries over credit markets.

After starting the day higher, the TSX quickly followed U.S. markets into negative territory after investment bank Bear Stearns BSC.N said it had been forced to get emergency funds from the U.S. Federal Reserve and JPMorgan Chase due to a cash squeeze.

The development intensified concerns over problems in financial markets and the widening ripple effect of troubles in the U.S. mortgage market.

On Bay Street, the banking sector was battered down 2.9 percent, with all the major banks lower. Toronto-Dominion Bank (TD.TO) shed C$2.09, or 3.3 percent, to C$61.29, while Royal Bank of Canada (RY.TO) slid C$1.83, or 3.9 percent, to C$45.52.

“It’s not often that a major league firm of some note melts down like this, so obviously there’s a few more cards to fall,’ said Paul Hand, managing director at RBC Capital Markets of Bear Stearns.

“It’s obviously pretty upsetting to the global framework ... it’s important that those things stay liquid and keep moving or else the whole system will seize up.”

The S&P/TSX composite index .GSPTSE closed down 190.66 points, or 1.42 percent, at 13,252.84 with all but one of its 10 main sectors lower.

The large energy sector weighed on the benchmark, falling 1.1 percent, as investors preferred to lock in profits, while the price of oil eased slightly after seven days of record highs. Suncor Energy (SU.TO) was down C$2.93, or 2.7 percent, at C$104.13 and Imperial Oil (IMO.TO) fell C$1.79, or 3.2 percent, at C$53.40.

BlackBerry maker Research In Motion RIM.TO was also among the biggest decliners, falling C$3.94, or 3.8 percent, to C$100.18.

The subindex of gold producers was the one bright spot, edging up 0.9 percent after spot gold pierced $1,000 an ounce. The gain helped pull the larger materials sector up 0.02 percent. Agnico-Eagle Mines (AEM.TO) added C$2.47, or 3.2 percent, to C$79.00 and Kinross Gold (K.TO) rose 43 Canadian cents, or 1.7 percent, to C$26.51.

$1=$0.98 Canadian Reporting by Leah Schnurr; editing by Rob Wilson

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