September 29, 2008 / 2:23 PM / in 9 years

UPDATE 1-Toronto stocks dive on more credit crisis fallout

*Energy stocks fall 6.5 percent on oil’s slide

*Financials drop 1.8 percent as bank jitters spread

*Manulife chief says insurer in “excellent” shape

(Adds details)

TORONTO, Sept 29 (Reuters) - The Toronto Stock Exchange’s main index was sharply lower on Monday morning as the rescue of European banks and a takeover of most of Wachovia Corp WB.N by Citigroup (C.N) heightened concerns about the fallout from the credit crisis.

Markets were on tenterhooks as European authorities set several bank rescue operations on Monday, including a plan to partly nationalize Fortis NV FOR.BR [ID:nLS357697]. In the United States, Citigroup, the largest U.S. bank, set a deal to acquire the bulk of Wachovia’s assets. [ID:nLT436737].

Meantime markets awaited the U.S. House vote on the big financial industry bailout plan. [ID:nLT436737] For links to more stories, see [ID:nN22402709]

Shortly before 10 a.m. EDT, the S&P/TSX composite index .GSPTSE was down 438.54 points, or 3.62 percent, at 11,687.46, with all of its 10 main groups lower.

The heavily-weighted energy and materials groups, which combined account for about half of the index’s weigh, slumped 6.5 percent and 4.2 percent, respectively, as oil plunged more than $5 to $101.50 a barrel on a firmer U.S. dollar and on signs the credit crisis is spreading beyond the United States to Europe. [ID:nSYD370166]

Canadian Natural Resources (CNQ.TO), a top net loser, shed 9.9 percent to C$72.60.

In materials, heavyweight Potash Corp of Saskatchewan (POT.TO) tumbled 9 percent to C$137.94 and Agrium Inc (AGU.TO) 13.2 percent to C$57.19.

The financial services sector was down 1.8 percent with Manulife Financial (MFC.TO) (MFC.TO) falling 0.7 percent to C$37.52.

The insurer’s chief executive told analysts the firm is in “an excellent position” to weather the financial-market turmoil, compared with industry peers, because it has modest debt levels and a stable deposit base. [ID:nN29370501]

Canadian Imperial Bank of Commerce (CM.TO) (CM.TO) fell 1.8 percent to C$61.05. ($1=$1.04 Canadian) (Reporting by Jennifer Kwan; Editing by Peter Galloway)

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