November 28, 2008 / 4:24 PM / 10 years ago

CANADA STOCKS-TSX falls as oil drops, U.S. shoppers weigh

* Energy sector drops in line with oil below $52

* Cameco off 3.6 pct, suspends uranium hexafluoride output

* Jitters about U.S. holiday shopping season weigh (Adds details, analyst’s comments, updates figures)

TORONTO, Nov 28 (Reuters) - The Toronto Stock Exchange’s main index lost more than 1 percent on Friday morning with weakness in the energy group the main drag as oil prices dropped, but with concern also focusing on the outlook for U.S. retailers at the start of the U.S. holiday shopping season.

The oil and gas sector was down 3.1 percent as the price of oil fell below $52 a barrel on a developing view that OPEC ministers gathered in Cairo this weekend may decide to delay any cut in supply until they meet again in December. [ID:nN28393253]

“I think you’re just getting follow-through on the concerns that OPEC has expressed. They are clearly concerned about dropping demand, which is, of course, a function of a slowing world economy,” said Bob Gorman, chief portfolio strategist at TD Waterhouse.

Oil company Nexen NXY.TO, which rose sharply on Thursday on renewed takeover rumors, declined more than 13 percent to C$22.58.

The materials group was also lower, down 3 percent, as metals prices fell. Cameco (CCO.TO) lost 3.6 percent to C$20.88 after it said it is suspending uranium hexafluoride production at its Port Hope, Ontario, plant until the second half of 2009. [ID:nWNAB8114]

Shortly after 10:50 a.m. (1550 GMT), the S&P/TSX composite index .GSPTSE was down 100.57 points, or 1.2 percent, at 8,653.20. Six of the index’s 10 main groups headed higher. If the index finishes lower on Friday, it will snap a five-day win streak.

Trading volume was light, possibly exaggerating some price movements, as U.S. stock markets are open half a day after being closed for the Thanksgiving holiday on Thursday.

A negative tone was reinforced by investor concern that the U.S. economy may sputter further if consumers keep their wallets shut during the kickoff weekend for the holiday shopping season.

“Clearly the question du jour is what sort of numbers will American retailers post today and tomorrow, which tends to be a benchmark as to how they are going to fare for the season,” Gorman said.

“The numbers I think have a significant effect on the market one way or another.”

Meanwhile, Canada’s three opposition parties said the government’s fiscal and economic update on Thursday did not contain needed stimulus for an economy increasingly hit by the global crisis. This put the Conservative minority government on the edge of collapse on Friday, just six weeks after its reelection, [ID:nN28425188] but it seemed to have only a limited impact on the Toronto stock market.

$1=$1.24 Canadian Reporting by Ka Yan Ng; editing by Peter Galloway

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