(Updates throughout with analyst comment, details, market
reaction)
* TSX down 128.46 points, or 0.93 percent, to 13,736.61
* Eight of the TSX's 10 main groups down
By Solarina Ho
TORONTO, Aug 31 (Reuters) - Canada's main stock index,
coming off a rebound last week, slumped more than 1 percent on
Monday as resource stocks resumed their slump on falling
commodity prices.
The index, which had been steadily declining since April,
sank to its lowest level since 2013 last week on investor
worries over China's economic growth. Those concerns remain,
while excess crude supply also is weighing on crude prices.
"I think we're into our period of seasonal weakness, which
usually runs from mid-August to mid-October," said Douglas
Davis, chief executive officer at Davis-Rea, adding that the
market has broadly risen for the last seven years without a
solid correction.
"It's way overdue. And it should go further. We need a good
decline to destabilize the market and get it ready again."
At 11:27 a.m. EDT (1527 GMT), the Toronto Stock Exchange's
S&P/TSX composite index .GSPTSE fell 128.46 points, or 0.93
percent, to 13,736.61. At one point, it was down 1.53 percent to
13,653.87.
Financial stocks, the sector carrying the most weight on the
index, also lost ground, with Royal Bank of Canada RY.TO
stumbling 1.9 percent to C$72.29, and Toronto-Dominion Bank
TD.TO giving up 1.9 percent to C$51.92. The overall group,
which also recouped some of its recent losses last week on the
back of forecast-topping quarterly results, retreated 1.4
percent.
"It's interesting that the banks have been under pressure,
because they are really still pretty darn solid ... the banks
are becoming pretty good value," said Davis, adding that foreign
investors may be shorting bank stocks in advance of the Oct. 19
Canadian federal election. The left-leaning New Democratic
Party, which vows to raise taxes on large corporations and has
never won a federal election, is leading the polls.
Of the S&P/TSX composite index's 10 main groups, eight were
in negative territory. Declining issues outnumbered advancing
ones on the TSX by 140 to 104, for a 1.35-to-1 ratio on the
downside.
The materials group, home to mining firms, sank 1.9 percent,
while energy stocks retreated 0.4 percent.
Suncor Energy Inc SU.TO fell 2.0 percent to C$36.06, while
Barrick Gold Corp ABX.TO tumbled 4.7 percent to C$9.00.