June 22, 2009 / 2:17 PM / 10 years ago

CANADA STOCKS-TSX tumbles as commodities slide

* TSX sinks 3.23 percent to 9,955.43

* World Bank forecast cut hurts commodity prices

* Manulife shares tumble 13.5 percent (Adds details, quote)

By Jennifer Kwan

TORONTO, June 22 (Reuters) - Toronto’s resource-heavy main stock index fell sharply on Monday morning as commodity prices dropped after the World Bank cut its 2009 growth forecasts for most economies, dimming hopes for economic recovery.

The World Bank warned that prospects for the global economy remained “usually uncertain” despite recent signs of improvement in some parts of the world. [ID:nSGP000012]

“The key factor this morning is the World Bank cutting its global forecast,” said Francis Campeau, broker at MF Global Canada, in Montreal. “That’s what is weighing a lot on commodities.”

Suncor Energy (SU.TO) was down 6.2 percent at C$33.03, and Canadian Natural Resources (CNQ.TO) fell 5.6 percent at C$55.60. Barrick Gold (ABX.TO) dropped 3.2 percent to C$37.41.

The index’s key energy and materials sectors sank 4.6 percent and 3.9 percent, respectively, as the price of oil CLc1 tumbled below $68 a barrel, in part on strength in the U.S. dollar, while gold and base metals prices also dropped.

At 9:55 a.m. (1355 GMT), the S&P/TSX composite index .GSPTSE was down 332.52 points, or 3.23 percent, at 9,955.43, with nine of its 10 main groups lower. The small health care group was up 0.2 percent.

Another major drag on the index was Manulife Financial (MFC.TO), which slid 13.5 percent to C$20.11.

On Friday, the insurer Manulife Financial said it received an enforcement notice from the Ontario Securities Commission that found the company failed to meet certain disclosure obligations in its segregated funds and variable annuity guaranteed products. [ID:nN19461071]

The slide comes after the TSX finished last week lower, ending a stretch of four consecutive weekly gains. The index is up about 33 percent from its March lows.

$1=$1.15 Canadian Reporting by Jennifer Kwan; editing by Peter Galloway

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