* S&P/TSX composite ends downs 1.8 percent at 11,469.10
* Obama’s bank plan shakes financial shares
* Resource shares weaken on falling commodity prices (Adds details)
By Ka Yan Ng
TORONTO, Jan 21 (Reuters) - Toronto’s main stock index fell hard for a second session and hit its lowest point in five weeks on Thursday, rattled by falling commodity prices and a White House plan to crack down on risk-taking by U.S. banks.
U.S. President Barack Obama took aim at “too big to fail” U.S. banks with a plan that would rein in their trading activities and ability to grow. [ID:nN21115923]
The Obama plan sent bank shares tumbling and major equity indexes around the world fell sharply. It was the second day of big stock market falls. Markets dived on Wednesday after China announced lending restrictions that could slow world economic growth. [MKTS/GLOB]
Toronto-Dominion Bank TD.TO was the top heavyweight decliner, down 2.52 percent at C$62.25. Bank of Nova Scotia BNS.TO, Manulife MFC.TO, Bank of Montreal BMO.TO and Royal Bank of Canada RY.TO were also among the top 10 losers in a session that saw the index’s key financials group tumble 1.84 percent.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE lost 210.22 points, or 1.8 percent, to close at 11,469.10, not far off its 11,461.25 low for the day.
All 10 of the TSX’s main sectors were lower.
“It’s fairly a one-way street today,” said Francis Campeau, broker at MF Global Canada in Montreal. “There’s a bit of a Chinese hangover and Mr. Obama put the final nail in the coffin.”
He said the U.S. plan had a tough tone but many questions swirled as to whether the proposals, which require congressional approval, would prevent banks or financial institutions that own banks from investing in, owning or sponsoring a hedge fund or private equity fund.
Resource issues were hit heavily as gold prices fell below $1,100 an ounce, their lowest level this year, and oil dropped to a 2010 low around $76 a barrel. The index’s materials group, home to gold producers, was off 3.8 percent. The oil and gas sector was down 1.7 percent. [O/R] [GOL/]
Among big gold miners, Barrick Gold ABX.TO was down 3.5 percent at C$38.31, and Goldcorp G.TO fell 3 percent to C$38.82.
Among big energy players, Suncor SU.TO fell 2.1 percent to C$35.85, and EnCana ECA.TO declined 3.8 percent to C$34.05.
In economic news, the Bank of Canada said the economy is on track to recover this year and the outlook has improved since October. It gave few hints on how soon it will start raising record-low interest rates. [ID:nN21224555]
$1=$1.05 Canadian Editing by Peter Galloway