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(Reuters)
By Ka Yan Ng
TORONTO (Reuters) - Toronto's main stock index fell by 200 points on Thursday as debt concerns in Dubai and job cuts at two of Canada's best-known companies heightened anxiety about the stability of the economic recovery.
Financial stocks were among the hardest hit as investors wondered if banks had any exposure to bad debt in the Gulf. The news also triggered widespread concern about the financial health of the once-booming Mideast region.
Royal Bank of Canada was the biggest drag on the index, down 2.3 percent at C$55.88, while Toronto-Dominion Bank was off 1.99 percent at C$65.84. Bank of Nova Scotia lost 2.3 percent to 47.91.
"Given the fantastic run that Canadian banks have had, investors would be content to take profits first and ask questions later," said Elvis Picardo, an analyst and strategist at Global Securities in Vancouver.
Manulife Financial was the only financial services company to confirm it has no exposure to flagship holding company Dubai World and its affiliates, which had spearheaded the Emirate's breakneck growth. Manulife fell 0.5 percent to C$18.50.
The S&P/TSX composite index fell 200.10 points, or 1.72 percent, to 11,436.80. Nine of the TSX's 10 main groups dropped as the Dubai news spread.
"This is a center that affects the Persian Gulf. There's a lot of nervousness: Will it spread out there? There's a bit of a scary, psychological effect," said Sal Masionis, stockbroker at Brant Securities.
Masionis also said the TSX has enjoyed a good rally recently so profit-taking was understandable. Entering the session, the TSX was up about 7 percent on the month.
Job cuts announced by train and planemaker Bombardier and telecommunications company Rogers Communications on Thursday added to worries about the Canadian economy, which is in the tentative stages of emerging from recession.
"Taking these things together tends to make investors a little nervous," Picardo said.
Bombardier fell 3.8 percent to C$4.60.
Rogers Communications lost 1.5 percent to C$32.26.
Cogeco Cable topped the list of top heavyweight gainers after Rogers said it is buying a bigger stake in it. Cogeco Cable gained nearly 5 percent to end at C$35.10.
Resource stocks were knocked lower as the price of gold retreated, while oil fell toward $76 a barrel. Top oil company Suncor Energy fell 2.4 percent to C$38.01, while miner Goldcorp dropped 3.1 percent to C$45.10.
Volume was also a fraction of its normal levels with U.S. markets closed for the Thanksgiving Day holiday.
($1=$1.06 Canadian)
(Editing by Peter Galloway)
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