August 15, 2008 / 2:58 PM / 11 years ago

UPDATE 1-Toronto stocks slide on commodities slump

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TORONTO, Aug 15 (Reuters) - Toronto Stock Exchange’s main index was sharply lower on Friday morning, as a slump in commodity prices hit energy and materials stocks.

Oil slipped to below $113 a barrel on faltering global demand and rising supply, sliding further from its record above $147 in July.

Gold also took a thumping, sagging below $800 an ounce, as a strengthening U.S. dollar and a sluggish global economy hit demand.

“Commodities are weak on the prospect of a global slowdown,” said Francis Campeau, broker at MF Global Canada, in Montreal.

Commodities are also getting hit because of a strengthening U.S. dollar and as speculators liquidate their long positions in oil and gold, Campeau added.

Shortly after the open, the S&P/TSX composite index .GSPTSE was down 216.34 points, or 1.6 percent, at 13,142.57, with most of its 10 main groups lower.

The key energy sector slipped 2.9 percent with EnCana Corp (ECA.TO) down C$2.70, or 3.7 percent, at C$70.40.

The materials sector, home to resource shares, fell 3.5 percent. Kinross Gold (K.TO) dropped 71 Canadian cents, or 4.3 percent, to C$15.89, while Agnico-Eagle (AEM.TO) slipped 5 percent to C$51.18.

Commodities have been hit across the board as worries over the health of the global economy continue to weigh. But the selloff has also eased anxieties over inflation and consumer spending.

As well, the market has been more susceptible to volatility recently due to thinner volumes during summer months, said Campeau.

On the economic front, Canada Mortgage and Housing Corp said on Friday that housing starts will moderate in 2008 and then slide further in 2009, as demand sags and the costs of carrying a mortgage rise.

Elsewhere, units of Bonterra Energy Income Trust BNE_u.TO rose C$1.66, or 5.2 percent, to C$33.86, the top net gainer on the TSX.

Bonterra said on Friday it plans to restructure itself into a dividend-paying corporation, and launched a takeover bid of Silverwing Energy Inc SVW.TO.

Silverwing was up 4 Canadian cents at 7 Canadian cents. ($1=$1.06 Canadian) (Reporting by Jennifer Kwan; editing by Rob Wilson)

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