September 29, 2008 / 4:30 PM / 10 years ago

UPDATE 2-Toronto stocks dive on more credit crisis fallout

* Energy stocks fall 7 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 tumbled more than 450 points on Monday, led by a retreating energy sector as oil prices sagged amid concerns that fallout from the U.S. financial crisis was spreading rapidly around the globe.

Markets were on tenterhooks as European authorities set up several bank rescue operations on Monday, including a plan to partly nationalize Fortis NV FOR.BR [ID:nLS357697]. In the United States, Citigroup Inc (C.N), the largest U.S. bank, moved to acquire the bulk of Wachovia Corp WB.N [ID:nLT436737].

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

As part of co-ordinated action by the world’s major central banks, the Bank of Canada increased the amount of its swap facility with the U.S. Federal Reserve on Monday to US$30 billion from US$10 billion. [ID:TOR003487]

“What’s driving the Canadian market today is fear that this economic slowdown is going to be more global and more pronounced than people were previously giving credit to,” said Michael Sprung, president of Sprung & Co. Investment Counsel.

“It’s fear in the form that the bailout package in the U.S. is going to be insufficient to stem a global slowdown and, possibly, a global recession.”

At around 11:45 a.m. EDT, the S&P/TSX composite index .GSPTSE was down 457.34 points, or 3.77 percent, at 11,668.66, with all 10 of its main sectors lower.

The heavily weighted energy and materials groups, which combined account for about half the index’s weight, slumped 7 percent and 3.5 percent, respectively, as oil plunged more than $7 to below $100 a barrel on a firmer U.S. dollar and on signs the credit crisis was spreading beyond the United States to Europe. [ID:nSYD370166]

“If we are heading toward a pronounced global slowdown then energy consumption is going to be dramatically reduced,” said Sprung.

Canadian Natural Resources (CNQ.TO), a top net loser, shed 9.7 percent to C$72.75.

In materials, heavyweight Potash Corp of Saskatchewan POT.TO tumbled 6.6 percent to C$142.00 and Agrium Inc AGU.TO fell 10.2 percent to C$59.17.

Barrick Gold (ABX.TO) was up 3.4 percent at C$39.52 as the price of bullion rose on safe-haven buying [ID:nN29392871].

The financial services sector was down 1.8 percent with Manulife Financial (MFC.TO) falling 0.9 percent to C$37.46.

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) fell 3.5 percent to C$60.00.

In company news, Teck Cominco Ltd TCKb.TO completed the syndication of $9.8 billion in financing for its takeover of Fording Canadian Coal Trust FDG_u.TO. [ID:nWNAB3643]. Teck fell 11 percent to C$29.83, while Fording rose 1.7 percent to C$84.58.

$1=$1.04 Canadian Reporting by Jennifer Kwan; editing by Rob Wilson

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below