(Adds analyst Johnston's comments, market reaction, updates
trading)
* TSX down 183.36 points, or 1.33 percent, to 13,553.64
* Nine of the TSX's 10 main groups fall
By Solarina Ho
TORONTO, Aug 21 (Reuters) - Canada's main stock index sank
on Friday to its lowest in 1-1/2 years on persistently grim
global sentiment following more disappointing data out of China.
Global equity markets plummeted toward their worst week this
year while the beating in commodities continued as data out of
China showed manufacturing in the country was slowing at the
fastest pace since the financial crisis in 2009. MKTS/GLOB
The commodities-heavy TSX took another drubbing, with energy
stocks falling 1.4 percent and materials sliding 1.7 percent.
The hefty financials group, which also reports quarterly results
next week, fell 1.5 percent.
"We're really breaking some really key levels. It's a sign
that we're in a very severe correction. It's being driven by a
continued slowdown in the global production cycle, which is so
important for the demand for commodities," said John Johnston,
chief strategist at Davis-Rea, adding that emerging markets have
been a risk for some time.
"Unless they start to stabilize and turn up, they could
become a big problem. I'm starting to get worried they're going
to drag the global economy into a recession."
Canadian Natural Resources CNQ.TO fell 2.8 percent to
C$26.77.
Crude prices headed for their longest losing streak since
1986 following the dismal Chinese data, which also sent copper
prices down. U.S. oil futures CLc1 tumbled 3.1 percent to
$40.06 a barrel, while three-month copper CMCU3 on the London
Metal Exchange dropped 1.4 percent to $5,048.50 a tonne.
O/R MET/L
At 11:31 a.m. EDT (1531 GMT), the Toronto Stock Exchange's
S&P/TSX composite index .GSPTSE had tumbled 183.36 points, or
1.33 percent, to 13,553.64, after dropping as low as 13,570.26,
a level not seen since February 2014.
Johnston expects to see an intermediate rally in the fall,
but said there was a serious risk of a bear market next year.
"It's going to fizzle. Right now, cash is king," he said.
Of the index's 10 main groups, only telecoms were on higher
ground, up 0.7 percent. Most other sectors fell more than 1
percent, including consumer staples, which slumped 1.9 percent.
Convenience store operator Alimentation Couche-Tard
ATDb.TO lost 4.6 percent to C$55.35.
Royal Bank of Canada RY.TO fell 1.4 percent to C$73.06 and
was among the biggest drags on the TSX. Manulife Financial Corp
MFC.TO was down 3.1 percent at C$20.66.
In corporate news, Eldorado Gold Corp ELD.TO shares
plunged 12.3 percent to C$4.57 after the company said on
Thursday it suspended mining activities in northern Greece.
ID:nL1N10V2PY
Declining issues outnumbered advancing ones on the TSX by
220 to 24, for a 9.17-to-1 ratio on the downside. The index
posted two new 52-week highs and 58 new lows.