November 17, 2008 / 5:16 PM / 10 years ago

CANADA STOCKS-Toronto index off nearly 2 pct at midday

* Oil above $58 a barrel, fails to lift energy sector

* Tech sector lone bright spot on broadly lower index

* Sentiment weak as Japan falls into recession

TORONTO, Nov 17 (Reuters) - The Toronto Stock Exchange’s main index was down nearly 2 percent late on Monday morning as gloomy sentiment from a deteriorating world economy outweighed the rising price of oil.

Sentiment was shaky on news that Japan’s economy joined Europe’s by slipping into recession [ID:nSP354083], and as the weekend’s meeting of the world’s major governments produced few concrete stimulus steps. [ID:nN16647523]

Shortly after 11:30 a.m. (1630 GMT), the S&P/TSX composite index .GSPTSE was down 169.49 points, or 1.87 percent, at 8,886.47. All but one of the index’s 10 main groups were in the red. That added to last week’s 5.6 percent slide, its weakest showing since Oct. 10.

“There’s continued negative sentiment from Friday. Nothing really has changed. The G20 meetings didn’t offer anything in terms of substantive positive news for markets,” said Andrew Pyle, wealth advisor at ScotiaMcLeod in Peterborough, Ontario.

“I think, right now, market participants are convinced that we’ll probably witness yet another major leg down in the major industries before we get to the elusive bottom.”

The influential oil and gas group failed to benefit from a rising oil price, which rebounded above $58 a barrel after sliding close to its lowest level in about two years.

The energy sector was down 2.2 percent after retreating from brief, early gains.

Petro-Canada PCA.TO was off 4.5 percent at C$24.62 after it said it would defer the final investment decision on the mining portion of the C$21 billion ($17 billion) Fort Hills oil sands project until 2009 because of global economic turmoil and sagging crude prices. [ID:nBNG339338]

UTS Energy Corp UTS.TO, which also holds a stake in the project, dropped 10 percent to 82 Canadian cents. Teck Cominco Ltd TCKb.TO, another partner, saw its class B shares rise 6.5 percent to C$6.76.

The heavily weighted financials group was down 2.6 percent, after U.S. banking giant Citigroup (C.N) announced plans to cut 52,000 from its workforce amid souring economies and global credit conditions. [ID:nN17468336]

The gloomy news helped drag Bank of Montreal (BMO.TO) down 3.4 percent to C$40.09 and Royal Bank of Canada (RY.TO) down 2.9 percent to C$43.23.

The information technology group was the lone bright spot on the index, up 0.5 percent. Research In Motion RIM.TO, which has been trending lower all month, rose 3.5 percent to C$51.10. Earlier, Barclays Capital cut its price target on the BlackBerry maker and cut its smartphone growth estimate. [ID:nBNG408943]

$1=$1.22 Canadian Reporting by Ka Yan Ng; editing by Rob Wilson

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