By Jonathan Spicer
TORONTO (Reuters) - The Toronto Stock Exchange's main index fell more than 300 points on Friday, driven lower by broad-based profit-taking in the heavyweight resource and financial sectors.
Investors locked in profits in the energy and materials sectors, which together account for about 45 percent of the market and have been driving the TSX higher in recent weeks.
The energy sector had risen in the seven previous sessions, but was down 2.6 percent on Friday, its steepest fall in a month. It took a breather as U.S. crude oil retreated from a record high above $90 a barrel, reached earlier in the day.
"It's had a hard run, and people just want to capture some of their gains before the weekend," said Brian Pow, vice-president, research and equity analyst at Acumen Capital Partners in Calgary.
By midday, the S&P/TSX composite index <.GSPTSE> had recovered somewhat, but was still down 257.94 points, or 1.8 percent, at 14,074.09.
Energy heavyweight Encana
Earlier in October, TSX oil and gas stocks were depressed by the prospect of Alberta imposing higher taxes and royalties, as recommended by a panel appointed by the provincial government. Premier Ed Stelmach said he would respond formally to the recommendations later this month.
"Over the next week, people are going to focus closely on the decision, and that may be the reason they're taking profits off the table," said Pow.
"If Alberta goes ahead with this royalty report as stated, there is going to be significant carnage across the market."
The materials sector slipped 2.3 percent as the prices of
most metals, including gold, slipped. Barrick Gold
Financials, the biggest of the TSX sectors, also tumbled as
worries about the lingering effects of the global credit
squeeze returned. Manulife Financial
All TSX sectors were lower, including a 1 percent decline in industrials and a drop of more than 4.4 percent in the small health-care group.
Angiotech Pharmaceuticals
Luc Girard, director of the portfolio advisory group at Desjardins Securities in Montreal, noted the effect of the 20th anniversary of the 1987 "Black Monday" stock market crash: "It's a psychological item, but I think it's a very important one," he said.
($1=$0.96 Canadian)
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