November 17, 2008 / 10:08 PM / 10 years ago

CANADA STOCKS-TSX tumbles on financials, commodities

* TSX slumps for second straight session

* Financials lead index lower, down 3.8 percent

* Petro-Canada slumps after delays project decision (Adds closing numbers, quotes, details)

By Jennifer Kwan

TORONTO, Nov 17 (Reuters) - The Toronto Stock Exchange’s main index sank nearly 3 percent on Monday as financial services and commodity-related issues were pulled down by gloomy sentiment from a faltering world economy.

The influential financial services sector dropped 3.8 percent as investor sentiment soured on news that Japan’s economy had joined Europe’s by slipping into recession, and as the weekend’s meeting of the G20 countries produced few concrete stimulus steps.

U.S.-based financial major Citigroup (C.N) added to the gloom by announcing plans to cut 52,000 jobs. [ID:nSP354083]

“There’s more to come. We haven’t reached the bottom in terms of the bad news,” said Stephen Carlin, vice-president of Canadian equities at KBSH Capital Management in Toronto.

Heavily weighted issues that helped drag the TSX lower included Manulife Financial (MFC.TO), down 8.8 percent at C$21.06, Royal Bank of Canada (RY.TO), off 2.6 percent at C$43.36, and Toronto-Dominion Bank (TD.TO), down 3.4 percent at C$51.75.

The S&P/TSX composite index .GSPTSE ended down 260.51 points, or 2.88 percent, at 8,795.45 with eight of its 10 main groups lower.

The broader market was also pressured by a slump in commodity-related sectors, said Kate Warne, Canadian market strategist at Edward Jones in St. Louis, Missouri.

“It’s continuing worries that the economy is slowing down around the world and, as a result, the demand for commodities is likely to be lower and, no surprise, the prices have dropped in anticipation,” Warne said.

The influential energy and materials groups fell 3 percent and 3.5 percent respectively, as oil dropped $2.09 to settle at to $54.95 a barrel [ID:nSYD352049], while gold and base metals also sagged.

EnCana Corp (ECA.TO) dropped 5.9 percent to C$51.50, while Goldcorp (G.TO) slid 7.5 percent at C$24.25.

Petro-Canada PCA.TO sank 7.1 percent to C$23.95 after it said it would defer its final investment decision on the mining portion of the C$21 billion Fort Hills oil sands project until 2009, citing global economic turbulence and depressed crude prices. [ID:nBNG339338]

UTS Energy Corp UTS.TO, which also holds a stake in the project, dropped 12.1 percent to 80 Canadian cents. Teck Cominco Ltd TCKb.TO, another partner, rose 4.6 percent to C$6.64.

On Wall Street, U.S. stocks fell on concerns of an accelerating global slowdown and Citigroup’s job cuts. [ID:nN17525829]

The Dow Jones industrial average .DJI fell 223.73 points, or 2.63 percent, to 8,273.58, while the Nasdaq composite index .IXIC ended down 34.80 points, or 2.29 percent, at 1,482.05. ($1=$1.23 Canadian) (Reporting by Jennifer Kwan; editing by Rob Wilson)

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