March 19, 2008 / 3:07 PM / 11 years ago

UPDATE 1-Toronto stocks dragged lower by resource shares

(Updates stock movement, adds details, quotes)

TORONTO, March 19 (Reuters) - Tumbling commodity prices helped pull the Toronto Stock Exchange’s main index lower on Wednesday morning with falling gold-mining and energy shares leading the way down.

Companies that deal in gold and other metals were among the biggest drags on the benchmark, with Agnico-Eagle Mines (AEM.TO) down C$2.93, or 4 percent, at C$70.57, and Goldcorp (G.TO) sliding C$1.82, or 4.4 percent, to C$39.32.

The subindex of gold producers gave up 2.9 percent as the price of gold stumbled, losing some of its appeal as a safe haven after Tuesday’s interest rate cut by the U.S. Federal Reserve.

The larger materials sector was down 3.7 percent, with Potash Corp of Saskatchewan POT.TO giving up C$6.49, or 4.1 percent, to C$152.88.

The heavyweight oil and gas sector took back 1.8 percent, as crude oil prices fell. Suncor Energy (SU.TO) was off C$2.11, or 2.1 percent, at C$100.81, while Canadian Natural Resources (CNQ.TO) lost C$1.71, or 2.4 percent, to C$69.32.

The S&P/TSX composite index .GSPTSE was down 133.27 points, or 1.01 percent, at 13,003.43 with all but two of its 10 main sectors in a downturn.

Douglas Davis, president at Davis-Rea, said that some of the enthusiasm has worn off after the U.S. Federal Reserve cut interest rates by 75 basis points on Tuesday, which helped push the index up more than 180 points in the previous session.

Davis said that the substantial cut was not as big as the full percentage point that some investors had hoped for, and that the dissenting opinion of two officials somewhat reduced the prospect of continued large cuts.

The financials sector led the upside, gaining 1.6 percent, in a relief rally after recent declines. Canadian Imperial Bank of Commerce (CM.TO) was up C$1.68, or 2.8 percent, at C$62.43, and Bank of Montreal (BMO.TO) rose C$1.14, or 2.7 percent, to C$43.03.

Lundin Mining (LUN.TO) fell 50 Canadian cents, or 6.8 percent, to C$6.91 after it posted a fourth-quarter loss, stung by lower zinc prices and large impairment charges.

$1=$1.00 Canadian Reporting by Leah Schnurr; Editing by Peter Galloway

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