January 29, 2009 / 10:13 PM / 10 years ago

CANADA STOCKS-Energy, financials drag TSX lower

* Toronto index unravels nearly all of Wednesday’s gain

* Banks and energy shares lead 143-point skid

* U.S. economic data adds to gloomy sentiment (Adds details)

By Frank Pingue

TORONTO, Jan 29 (Reuters) - Toronto’s main stock index ended lower on Thursday as nagging economic concerns hit weighty bank shares and lower oil prices rattled the energy group, forcing the TSX to undo nearly all its gains from the prior session.

Data from the United States that supported the notion of a deepening economic slump clouded an already dark outlook for bank and insurance companies and knocked the financial sector down 4.28 percent.

Lower prices for oil, a key Canadian export, coupled with news that Petro-Canada PCA.TO swung to a quarterly loss, were the main cause of the energy group’s 2.58 percent skid.

“This is the sort of common stuff and the way that markets are and this is what we’re going to have to deal with,” said Brian Pow, a research and equity analyst at Acumen Capital Partners in Calgary.

Among the key issues weighing on the index were insurer Manulife Financial (MFC.TO), which fell 6 percent to C$20.57, and energy company EnCana Corp (ECA.TO), which dropped 3.55 percent to C$55.19.

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE fell 143.47 points, or 1.61 percent, to 8,762.76, following a 146 point gain on Wednesday. Six of the TSX’s 10 sectors ended lower.

The slide in the financials sector, which makes up about 33 percent of the overall Toronto index, did not draw too much concern as it followed a string of three rising session.

There was no domestic economic data released on Thursday, but the gloomy U.S. numbers on housing, jobless claims and durable goods reinforced the notion of a prolonged recession there, and that sentiment spilled over to the Toronto market as well.

A combination of the quarterly loss from Petro-Canada and the drop in oil prices left the energy sector nowhere to go but down.

Shares of Petro-Canada finished 3.9 percent lower at C$27.56 after Canada’s No. 4 oil producer posted a quarterly loss and cut its 2009 production range. That could be a familiar tone for the sector as a number of other energy companies are due to release quarterly results in coming weeks.

On Wall Street, markets retreated as poor corporate earnings added to the fresh wave of bleak economic data.

The Dow Jones industrial average .DJI fell 226.44 points, or 2.7 percent, to 8,149.01. The Nasdaq .IXIC composite index dropped 50.50 points, or 3.24 percent, to 1,507.84.

$1=$1.22 Canadian Editing by Rob Wilson

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