April 16, 2010 / 5:28 PM / 8 years ago

CANADA STOCKS-TSX dives as Goldman fraud charge hits hard

* TSX down 1.13 percent at 12,073.43.

* Resources, financials lead index down (Releads on Goldman, updates prices, adds quotes)

By Claire Sibonney

TORONTO, April 16 (Reuters) - Toronto’s main stock index fell as much as 1-1/2 percent on Friday as financial and resource shares were yanked lower by news that Goldman Sachs has been charged with fraud by the U.S. securities regulator.

U.S. equity markets also tumbled after the U.S. Securities and Exchange Commission alleged fraud in the investment bank’s structuring and marketing of a debt product tied to subprime mortgages, which cost investors more than $1 billion.

The Toronto index’s heavily weighted financial sector dropped 0.7 percent with Royal Bank of Canada (RY.TO), the country’s biggest lender, down 0.6 percent at C$61.00, and No. 2 Toronto-Dominion Bank (TD.TO) off 0.7 percent at C$76.43.

“The Goldman Sachs story is getting most of the market participants to reduce risk, close up positions, see what’s going to come out of this and put some money on the sidelines,” said Francis Campeau, a broker at MF Global Canada, in Montreal.

With investors moving riskier assets off the table, resource shares extended earlier losses as commodity prices reeled from the Goldman news.

Oil prices fell 3 percent to below $83 a barrel, pushing the energy sector down 1.7 percent. [O/R]

Suncor Energy Inc (SU.TO), Canada’s biggest oil company, dropped 2.2 percent to C$34.05, and EnCana Corp (ECA.TO), the country’s largest natural gas producer, fell 1.4 percent to C$31.50.

Athabasca Oil Sands Corp (ATH.TO) was off almost 5 percent at C$13.90, continuing a slide that began when it went public at C$18 a share a week ago. Some portfolio managers attribute the decline to an overhang in stock issued before it debuted on the TSX.

“There is a huge overhang of stock from people who had bought Athabasca Oil Sands as a private company,” said a portfolio manager who did not participate in the IPO.

“Those people have been there for a few years, so they are likely sellers.”

At 1:00 p.m. (1700 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was down 138.09 points, or 1.13 percent, at 12,073.43. Eight of the 10 sectors were negative. Earlier, the index fell as low as 12,019.90.

The materials sector was down 1.9 percent as gold and copper prices fell about 2 percent each. [GOL/] [MET/L]

Barrick Gold Corp (ABX.TO), the world’s biggest gold producer, slipped 1.5 percent to C$39.52, while Teck Resources TCKb.TO, Canada’s biggest miner of base metals, plunged 3.4 percent to C$43.18

$1=$1.00 Canadian Additional reporting by Pav Jordan; editing by Peter Galloway

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