May 20, 2010 / 2:55 PM / in 7 years

CANADA STOCKS-TSX slumps on weak resources, growth concerns

* TSX slumps 2.14 percent to 11,415.94

* All 10 groups lower; 8 down more than 1 pct (Adds details)

By Ka Yan Ng

TORONTO, May 20 (Reuters) - Toronto’s main stock index fell sharply on Thursday, as heavyweight resource issues led a broad-based retreat sparked by concerns over Europe’s economic outlook.

By midmorning, the TSX had slumped to 11,409.45, its lowest level since Feb. 12, as investors feared that austerity measures needed to rescue fiscally weak euro zone countries would undercut the global economic recovery.

Key decliners included Suncor Energy (SU.TO), which dropped 3.7 percent to C$30.01, while Canadian Natural Resources (CNQ.TO) fell 3.3 percent to C$33.66.

Teck Resources TCKb.TO lost 4 percent to C$31.38, while Royal Bank of Canada (RY.TO) was off 1.9 percent at C$59.40. Bank of Nova Scotia (BNS.TO) tumbled 3 percent to C$48.75.

An unexpected jump in weekly U.S. jobless claims added to concerns about economic growth at a time when markets are already increasingly worried about the impact of new financial regulations. [ID:nN20125298]

At 10:30 a.m. (1430 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was down 249.83 points, or 2.14 percent, at 11,415.94.

All 10 of the index’s main groups were lower, with eight posting losses of more than 1 percent. The heaviest weighted financials, energy, and materials sectors saw losses of more than 2 percent.

“What the market is saying is there is a possibility of a double-dip recession. Maybe not a high probability, but at the very least we’re looking at a very, very slow and prolonged recovery,” said Michael Sprung, president at Sprung & Co. Investment Counsel.

“Unfortunately for the Canadian market, as a result of these concerns, commodity prices have weakened, the Canadian dollar is under siege.”

The commodity-influenced Canadian dollar has been part of a general exit from riskier assets in recent sessions, tumbling more than 2 U.S. cents on Thursday. [CAD/]

$1=$1.07 Canadian Reporting by Ka Yan Ng; editing by Rob Wilson

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