* TSX down 237.94 pts, or 2 pct, at 11,654.50
* Oil, gold and copper prices fall
* Energy and materials issues plunge (Adds details, analyst comments)
By Jon Cook
TORONTO, Nov 21 (Reuters) - Toronto’s main stock index tumbled 2 percent on Monday morning on heightened fears about euro zone debt contagion and reports that a U.S. congressional committee would miss a deadline for a deficit reduction plan.
In Europe, stock markets fell and bond yields rose as the euro zone debt crisis appeared to be spreading to the heart of the currency bloc. [MKTS/GLOB]
A gloomy European economic forecast on inflation, slowing exports and rising unemployment had European Central Bank members predicting a recession in the region by year’s end. [ID:nL5E7ML2GI]
“The increased likelihood that you have a double-dip in Europe means that anything economically sensitive is selling off,” said Bob Gorman, chief portfolio strategist at TD Waterhouse.
A U.S. congressional committee looked set to fail in an attempt to cut at least $1.2 trillion from the U.S. deficit over the next decade, helping lead to the broad selloff in riskier assets and currencies. [ID:nN1E7AK00C]
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was down 237.94 points, or 2 percent, at 11,654.50, amid a global downturn in equity markets. It was the index’s lowest level since Oct. 11.
Energy and materials issues were hardest hit as investors worried over the prospects for global economic growth as debt crises dominated headlines on both sides of the Atlantic.
The energy sector led the broader index lower, plunging nearly 3 percent as U.S. crude oil fell $2 a barrel and Brent crude lost more than $1.[O/R]
Suncor Energy (SU.TO) was the biggest drag on energy issues, tumbling 3.6 percent to C$30.35.
Mining stocks sagged as gold and copper prices fell sharply, pulling down the heavily weighted materials sector, which tumbled 2.5 percent.
“You’ve got a flight from risk and, in turn, a strengthening of the U.S. dollar and that in turn is making commodities come off,” said Gorman.
Base metal issues fell more than 4 percent as copper prices fell to their lowest levels in nearly a month on fears of a European slowdown and warnings from China about gloomy global growth prospects. [MET/L]
Tech Resources TCKb.TO was the biggest laggard, tumbling 3.1 percent to C$34.03.
Gold extended last week’s slide, falling more than 1 percent, swept lower by a U.S. dollar that gained on a flight to safety. [GOL/]
Goldcorp Inc (G.TO) was down 2.4 percent at C$50.63, with the overall gold subsector dropping 2.5 percent.
($1=$1.04 Canadian) (Editing by Rob Wilson)