June 24, 2008 / 3:00 PM / 11 years ago

UPDATE 1-Toronto stocks fall broadly, resources drag

(Updates to midmorning)

* TSX falls nearly 1 percent in broad retreat

* Resource issues sag as oil prices see-saw

* Financial sector hit by fresh credit worries

TORONTO, June 24 (Reuters) - The Toronto Stock Exchange’s main index tumbled on Tuesday morning, as resource shares retreated amid choppy oil prices and global markets set a negative tone.

The financial sector added to the downward momentum, caught up in resurgent worries over fallout from the credit crunch.

The energy and materials groups lost 1.2 percent and 0.8 percent respectively. In volatile action, the price of oil see-sawed after earlier rising to over $138 a barrel, while a rumor of an attack on Iran’s nuclear facilities was denied.

Paul Taylor, chief investment officer at BMO Harris Investment Management Inc, said that continuing economic worries and falling world markets helped set the negative mood in Toronto.

“I think this is just, across the board, people still feel that we’re not fully through the triple witch of higher energy prices, U.S. housing woes, and the specter of potentially higher U.S. interest rates as we go forward,” Taylor said.

The S&P/TSX composite index .GSPTSE was down 141.61 points, or 0.96 percent, at 14,550.21 with all 10 of its main sectors lower.

Among resource companies, Potash Corp of Saskatchewan POT.TO fell C$4.85, or 2 percent, to C$235.04, while Canadian Natural Resources (CNQ.TO) slid C$1.76, or 1.7 percent, to C$101.94.

In financials, Toronto-Dominion Bank (TD.TO) was off 90 Canadian cents, or 1.4 percent, at C$63.22, and Bank of Nova Scotia (BNS.TO) fell 61 Canadian cents, or 1.3 percent, to C$48.18. The group overall was down 0.8 percent.

On the upside, BCE Inc (BCE.TO) continued its rally, climbing 44 Canadian cents, or 1.2 percent, to C$37.02 in the wake of last week’s decision by the Supreme Court that backed the buyout of the company.

Waiting for the next rate move by the U.S. federal reserve also added to the market’s gloomy mood. Analysts will be watching for the U.S. central bank to take on tougher language on concern about inflation at its next interest rate decision on Wednesday.

Around the world, European stocks fell sharply, while U.S. markets were also lower, following data that showed U.S. consumer sentiment sank in June. ($1=$1.01 Canadian) (Reporting by Leah Schnurr; editing by Rob Wilson)

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