June 22, 2009 / 9:18 PM / 10 years ago

CANADA STOCKS-TSX dragged lower, commodities lead retreat

* TSX plunges 453.77 points to 9,834.18

* Energy and materials lead selloff

* Lowest close since May 15 (Adds details)

By Frank Pingue

TORONTO, June 22 (Reuters) - Toronto’s main stock index sank more than 4 percent on Monday to its lowest level in more than a month as falling commodity prices hit the resource-heavy TSX just after investors had thought the worst was over.

Concerns about an economic rebound weighed on oil prices and sent energy shares lower, while gold-mining issues tumbled as the price of gold hit its lowest level since May.

Suncor Energy (SU.TO) fell 8.6 percent to C$32.19, while EnCana Corp (ECA.TO) fell 5.7 percent to C$54.66.

The TSX’s retreat, the biggest point-fall since Dec. 1, was considered a pullback after the index had rallied considerably from the five-year low it hit in March. At one point in June it was up 43 percent from the March low.

“Some people might be locking in some of the profits that they made over the last three months,” said Bruce Latimer, a trader at Dundee Securities. “It was selling right across the board and they didn’t even try to rally the market at all, so we might be in for a few more days of this.”

The S&P/TSX composite index .GSPTSE fell 453.77 points, or 4.41 percent, to 9,834.18. All of the TSX’s 10 main sectors ended down, led by a 6.5 percent drop by the energy group and a 5.97 percent selloff in materials.

The materials group, which includes gold-mining stocks, was led lower by Barrick Gold Corp (ABX.TO), which fell 5 percent to C$36.68, and Goldcorp (G.TO), down 4.9 percent at C$37.61.

Much of the TSX’s rally from its March low was attributed to expectations for the global economy to emerge from the recession later this year. But that scenario was thrown into doubt on Monday when the World Bank warned that prospects for the global economy remained “unusually uncertain”. [ID:nSGP000012]

“We had a heck of a run since early March and the market tried to sell off a few times and there hasn’t been any follow-through,” said Latimer. “Now we have a bit of decent correction taking place.”

The uncertain economic outlook also helped explain the 3.5 percent skid in the financials index, which accounts for about 33 percent of the TSX.

Royal Bank of Canada (RY.TO) fell 1.9 percent to C$45.10, while Manulife Financial (MFC.TO), was the biggest drag on the index, shedding 12 percent to C$20.42.

The insurer was also pressured by news late on Friday that it had received an enforcement notice from the the Ontario Securities Commission that found it failed to meet certain disclosure obligations in its segregated funds and variable annuity guaranteed products. [ID:nN19461071]

$1=$1.15 Canadian

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