January 15, 2009 / 3:42 PM / 10 years ago

CANADA STOCKS-TSX hits 2009 low as banks and energy shares drop

* TSX turns lower after rising at open

* Financial and energy shares lead selloff

* TSX slide follows 273-point fall on Wednesday (Adds details)

By Frank Pingue

TORONTO, Jan 15 (Reuters) - Toronto’s main stock index fell on Thursday to its lowest point this year as nagging concerns about a drop in oil demand weighed on the resource heavy index while influential banking shares also tumbled.

The financial sector, which accounts for about 33 percent of the index, relinquished early gains and turned 1.6 percent lower on news that Bank of America is close to getting billions of dollars more in federal aid.

Shares of Royal Bank of Canada (RY.TO), the biggest drag on the index, fell 2.3 percent to C$34.04, while Toronto-Dominion Bank (TD.TO) shares dropped 1 percent to C$43.53.

“Bank of America needs government help for their Merrill Lynch takeover so that puts all of the financials into question ... as well as some investments that banks have made here in Canada,” said Sal Masionis, a stockbroker at Brant Securities.

“But general sentiment has been a little disappointing. We had the nice rally early in the year and it’s all of a sudden dying ... so it’s not a very nice feeling out here.”

Oil prices slid given gloom about the health of the world economy and dragged the energy sector down 3 percent. The fall in that sector came after OPEC decided to cut its forecast for 2009 world oil demand.

Shares of Canadian Natural Resources (CNQ.TO) fell 4.5 percent to C$44.64, while Suncor Energy (SU.TO) shares dropped 2.9 percent to C$25.70.

At 10:35 a.m. (1535 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was down 156.21 points, or 1.8 percent, at 8,532.42.

Earlier, the index dropped to 8,526.80, which marked its lowest level since Dec. 29. It had rallied as much as 42 points just after the open.

Seven of the TSX’s 10 sectors were lower.

($1=$1.25 Canadian)

Editing by Jeffrey Hodgson

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