September 15, 2008 / 2:25 PM / 10 years ago

UPDATE 1-Toronto stocks tumble on Lehman woes

*Oil shares slide with oil price on U.S. demand worry

*Gold rises on safe-haven buying; base metals slump

*Bank of Canada says will provide liquidity as required

(Adds details)

TORONTO, Sept 15 (Reuters) - The Toronto Stock Exchange’s main index plunged at the open on Monday, rattled by the bankruptcy filing of Wall Street’s Lehman Brothers Holdings Inc LEH.N and worries over other major financial institutions.

Shortly after the open, the S&P/TSX composite index .GSPTSE was down 350.07 points, or 2.7 percent, at 12,419.51, with all of its 10 main groups lower.

The financial services sector, which accounts for about a quarter of the index’s total weight, fell 2 percent with Canadian Imperial Bank of Commerce (CM.TO) down 3.2 percent at C$62.14.

Anxiety over the vulnerable U.S. financial sector heightened after a flurry of news from Wall Street, including the Lehman filing and a deal for Merrill Lynch MER.N to be taken over by Bank of America Corp (BAC.N). The U.S. Federal Reserve said that it would aid the battered financial industry.

Reports said also that American International Group Inc (AIG.N) is seeking help from the Federal Reserve. For details, see [ID:nN13574113]

The Bank of Canada said on Monday it will provide liquidity as required to shore up financial markets spooked by the bankruptcy filing of Lehman Brothers and sale of Merrill Lynch.

The heavyweight energy sector dropped 4 percent as oil prices fell to around $96 a barrel due to worries of lower U.S. demand and on signs that Hurricane Ike had spared key U.S. energy infrastructure. [ID:nSYD347689] Canadian Natural Resources (CNQ.TO) fell 4.2 percent to C$79.80.

The materials sector fell 2.3 percent as concerns over the fallout from the U.S. credit crunch overcame a rise in gold prices, which rose on safe-haven buying. Potash Corp of Saskatchewan Inc POT.TO POT.TO fell 1.9 percent to C$169.01, while First Quantum Minerals fell 4.5 percent to C$50.50. ($1=$1.07 Canadian) (Reporting by Jennifer Kwan; Editing by Peter Galloway)

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