February 20, 2009 / 10:05 PM / 10 years ago

CANADA STOCKS-Weak oils, financials drag TSX to 3-month low

* TSX sags 2.88 pct to lowest close since Nov. 20

* Index down 8.4 percent for the week

* Energy and financial sectors both drop 5 percent (Adds details, quote)

By Jennifer Kwan

TORONTO, Feb 20 (Reuters) - Toronto’s main stock index fell broadly on Friday to its lowest closing level in 3 months, as the heavily weighted energy sector sank on falling oil prices and the financial group retreated on worries over the U.S. banking sector.

The financial sector fell 5 percent, swept up by fears that some major U.S. banks could be nationalized. [ID:nN20201566] Manulife Financial (MFC.TO) was down 9.5 percent at C$13.12, while Royal Bank of Canada (RY.TO) was off 3.1 percent at C$27.07.

“The weakness you’re seeing on the financial stocks is largely being driven by, once again, the weakness south of the border,” said Elvis Picardo, analyst and strategist at Global Securities in Vancouver.

“That’s clearly spooking investors because that would pretty much wipe out any value for equity investors in those stocks.”

The big energy group sank 5 percent as oil CLc1 settled 1.37 percent lower at $38.94 a barrel, hit by persistent concerns about the worsening economic outlook. [ID:nSIN420478] Suncor Energy (SU.TO) sank 7.5 percent to C$22.15.

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed down 235.36 points, or 2.88 percent, at 7,949.99, with nine of its 10 main groups lower. The index shed 8.4 percent on the week, its steepest weekly loss since early December.

On the upside, the materials group gained 1 percent as gold bullion pierced the $1,000 an ounce level for the first time since last March, boosted in part by tumbling world markets as investors sought a safe haven. [ID:nLK128829]

Goldcorp (G.TO) rose 2.3 percent to C$40.02 and Barrick Gold (ABX.TO) climbed 0.4 percent to C$46.08.

“Next week should be an interesting week. If we continue to go down ... then who knows where the next stop will be,” said John Kinsey, portfolio manager at Caldwell Securities Ltd.

The blue chip S&P/TSX 60 index .TSE60 closed 13.31 points lower, or 2.71 percent, at 477.26

$1=$1.25 Canadian Reporting by Jennifer Kwan; editing by Rob Wilson

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