April 16, 2010 / 9:39 PM / 9 years ago

CANADA STOCKS-TSX dives as Goldman charge slams market

* TSX falls 1.15 percent to 12,070.66

* Energy, financials, materials big decliners

* SEC charges Goldman Sachs with fraud (Updates to close)

By Ka Yan Ng and Claire Sibonney

TORONTO, April 16 (Reuters) - Toronto’s main stock index slid more than 1 percent on Friday to close at its lowest level in more than two weeks as financial and resource issues were knocked lower by news that Goldman Sachs has been charged with fraud by the U.S. securities regulator.

Canadian equities, commodities and the currency were all deflated as investors ran for safety after the 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. [ID:nN16131161]

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE, which is tilted heavily with financial and commodity-related shares, ended down 140.86 points, or 1.15 percent, at 12,070.66, after hitting a one-week low earlier in the session following the Goldman news.

It closed at its lowest level since March 31 and was down 0.87 percent on the week, breaking a four-week streak of advances.

“The biggest factor that caused the market to turn was Goldman Sachs. That’s cast a pall on the financials sector,” said Michael Sprung, president of Sprung & Co Investment Counsel.

“In Canada, we’ve been impacted as well by the fact that oil, copper and gold are down. It’s really not a pretty day for people involved in the Canadian market.”

The Toronto index’s heavily weighted financial sector dropped 0.69 percent, with Toronto-Dominion Bank (TD.TO) off 1.08 percent at C$76.13. Insurance giant Manulife Financial (MFC.TO) fell 2.12 percent to C$19.40.

But Royal Bank of Canada (RY.TO), the country’s biggest lender, managed to eke out a gain of 0.03 percent to C$61.39.

With investors moving riskier assets off the table, resource shares extended early losses as commodity prices tumbled on the Goldman news. Oil prices fell sharply, pushing the energy sector down 1.95 percent.

The price of gold shed 2 percent and copper broke below a key level, pulling the TSX index’s materials group 1.71 percent lower. [O/R] [GOL/] [MET/L]

Suncor Energy Inc (SU.TO), Canada’s biggest oil company, dropped 3.33 percent to C$33.65, and EnCana Corp (ECA.TO), the country’s largest natural gas producer, fell 1.53 percent to C$31.47.

Barrick Gold Corp (ABX.TO), the world’s biggest gold producer, slipped 1.22 percent to C$39.65, while Teck Resources TCKb.TO, Canada’s biggest miner of base metals, plunged 4.52 percent to C$42.67.

Athabasca Oil Sands Corp (ATH.TO) was off more than 5 percent at C$13.85, continuing a slide that began when it went public at C$18 a share a week ago. Some portfolio managers attributed the decline to an overhang in stock issued before it debuted on the TSX. [ID:nN16124169]

Before its IPO last week, Athabasca Oil had 314 million shares outstanding. The IPO added another 75 million shares.

“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.”

Before market close, Porter Aviation Holdings Inc said it would proceed with an initial public offering activity in Canada. The airline provided no details on the size or timing of the offering. [ID:nN16149681]

“I suspect that it’ll be very popular,” Sprung said.

$1=$1.01 Canadian Additional reporting by Pav Jordan; editing by Peter Galloway

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