December 18, 2008 / 3:31 PM / in 9 years

CANADA STOCKS-TSX falls on oil's drop as market restarts

*Toronto, TSX Venture exchanges open after Wednesday halt

*TMX Group shares sink 3.2 percent after outage

*Energy leads TSX lower as oil falls below $40 a barrel (Adds quotes, details)

TORONTO Dec 18 (Reuters) - Toronto’s main stock index fell on Thursday morning, led lower by energy stocks as the price of oil tumbled, with trading restarting after the Toronto Stock Exchange was shut down Wednesday due to a technical glitch.

Heavily weighted stocks that led the market lower included oil company EnCana Corp (ECA.TO), down 4.2 percent at C$54.70, and miner Goldcorp Inc (G.TO), which was down 9 percent at C$35.81.

All eyes were on the market’s operations as the outage on Wednesday frustrated users and sent business to rival marketplaces.

Shares of TMX Group Inc (X.TO), which operates the exchange, sank 3.2 percent to C$23.81.

Cormark Securities analyst Jeff Fenwick, who maintains a buy recommendation with a price target of C$45.50, said the glitch made for bad headlines and brokerages lost trading commissions for the day.

But the technical problem shouldn’t hurt the company in the long run, he said.

“Virtually every trading desk in Canada will once again place the bulk of their trading liquidity on the TMX exchanges once they open on Thursday,” Fenwick said in a note before the market open.

Shortly after 9:45 a.m. (1445 GMT), the S&P/TSX composite index .GSPTSE was down 202.03 points, or 2.3 percent, at 8,522.08, with eight of its 10 main groups lower.

TMX did not elaborate on the nature of Wednesday’s outage except to say the initial findings showed a “network firmware issue resulted in complications with data sequencing,” which affected the delivery of data feeds.

The energy group dropped 5.7 percent on Thursday morning and led the key index lower. Suncor Energy (SU.TO) was down 7.2 percent at C$24.80.

Oil fell below $40 a barrel on doubts about the Organization of Petroleum Exporting Countries’ ability to curb output quickly after the group announced record production cuts. [ID:nN18378082]

Toronto’s big financials group fell 1.8 percent with Sun Life Financial (SLF.TO) down 1.1 percent at C$24.22. Earlier, a Globe and Mail newspaper report said the insurer is eyeing pieces of American International Group. [ID:nN18377224]

The materials sector fell 4.5 percent with Barrick Gold (ABX.TO) down 5.2 percent at C$40.55 as gold prices weakened. ($1=$1.20 Canadian) (Reporting by Jennifer Kwan; editing by Peter Galloway)

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