By Irene Kuan
TORONTO (Reuters) - Toronto's main stock index was down more than 1 percent on Thursday morning, dragged lower by Manulife Financial as investors reacted to a major stock offering by the country's biggest insurer.
Shares of Manulife were down 7 percent at C$18.72, while fellow insurer Sun Life Financial sagged 5 percent to C$27.29.
After markets closed on Wednesday, Manulife said it planned to issue C$2.5 billion ($2.3 billion) in equity to build "fortress level" capital reserves, but acknowledged the issue would be dilutive to earnings per share and return on equity.
"We've had such a strong market in a short period of time and often times you just need a little trigger to get people to sell," said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.
The TSX has rallied 54 percent since falling to a five-year low in March.
At 10:35 a.m. (1535 GMT), the S&P/TSX composite index was down 128.22 points, or 1.1 percent, at 11,524.47.
A 1.4 percent slide in the energy sector also contributed to the overall decline as oil prices fell on concerns over a recovery in demand in the United States.
Suncor Energy fell 1.6 percent to C$37.93, while EnCana Corp was down 1.8 percent at C$56.81.
(Editing by Rob Wilson)
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