October 16, 2008 / 4:06 PM / 10 years ago

UPDATE 2-Toronto stock index hits lowest point in 4 years

* Market swings erratically on investor jitters

* Materials sector down 11 pct, oil group off 6 pct

* Index is down more than 20 percent since end September

(Adds details)

TORONTO, Oct 16 (Reuters) - The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was sharply lower late on Thursday morning after falling to its lowest level in four years as jittery investors weighed the risk of recession as commodity prices weakened.

Softening resource prices put yet another chill on the index’s heavily-weighted energy and materials sectors, pushing the index down more than 100 points minutes after the opening bell. But it then reversed course and raced nearly 200 points higher, only to see all 10 main sectors quickly turn negative again, dropping more than 500 points at one point.

Shortly after 11:30 a.m. (1530 GMT), the S&P/TSX composite index .GSPTSE was down 489.84 points, or 5.25 percent, at 8,834.01.

A 10.5 percent drop in the materials sector, which includes miners and fertilizer issues, led the decline. The gold-mining subindex sagged 11 percent, with Barrick Gold (ABX.TO) off 12 percent at C$29.20, and Agnico-Eagle down 15.4 percent at C$39.94.

The composite index is down more than 20 percent since September. It has now erased the record burst higher at the start of this week that had helped make up for last week’s 16-percent drop.

“It’s continuing realization that a recession in the U.S. and in Europe is going to be a pretty bad one,” said Gavin Graham, director of investments at BMO Asset Management.

“You could actually make the argument that this sort of revisiting of the lows we saw last week is a lot more justified in that it’s being down on economic fundamentals as opposed to worries that the entire world financial system is going to seize up.”

Most of the world’s richest nations are in or close to recession and further interest rate cuts are needed to stem off more rot from the financial crisis, a quarterly Reuters poll [ID:nLG306696] showed on Thursday.

The Canadian economy should steer clear of a recession but economic growth will be hard to come by, the poll said. [ID:nN14394770]

A brief early rally in Toronto’s energy group on Thursday was unwound by midmorning as losses deepened after U.S. crude futures dropped to under $70 a barrel on a report that showed crude and gasoline inventories jumped last week. [ID:nN16378303]

Suncor (SU.TO) was down 11 percent at C$22.37, while Canadian Natural Resources (CNQ.TO) lost 8.2 percent to C$43.15.

The financials group was also under pressure, down 4 percent, following the lead set by U.S. financials following a $2.82 billion quarter loss posted by Citigroup [ID:nN16377271]. Banks were lower, but it was the insurers Manulife Financial (MFC.TO) and Sun Life (SLF.TO) that topped the net losers of the group. ($1=$1.20 Canadian) (Reporting by Ka Yan Ng and Jennifer Kwan; Editing by Peter Galloway)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below