TSX falls, eyes weekly losses as banking turmoil deepens

By Johann M Cherian

(Reuters) – Canada’s main stock index fell on Friday and was set for weekly losses, weighed down by energy and financial shares as turmoil in the European banking sector soured the mood.

Global markets were rattled after European banks fell sharply, led by Deutsche Bank and UBS, on mounting worries that the crisis in the sector was showing no signs of easing. [MKTS/GLOB]

At 10:13 a.m. ET (14:13 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was down 89.95 points, or 0.46%, at 19,369.97.

The financials sector and heavyweight banks lost 0.8% each.

“Markets continue to wrestle with this flare-up in uncertainty within the banking industry,” said Craig Basinger, chief market strategist at Purpose Investments.

“On a day-to-day basis, it looks worse today, with what’s going on in Deutsche Bank and the European banks.”

The energy sector slumped 1.5% on weak crude oil demand prospects after the U.S. energy secretary said refilling the country’s Strategic Petroleum Reserve (SPR) could take several years. [O/R]

The TSX is set for its third straight week of losses in March as hopes of calm returning to global financial markets earlier in the week were shattered following a loss of confidence in European lenders.

Canadian equities are now eyeing losses for the quarter ending in March.

Among company news, Enbridge Inc slid 0.2% after the U.S. Army Corps of Engineers extended the federal permitting process for the oil distributor’s proposed Great Lakes Tunnel.

Shares of Obsidian Energy Ltd fell 2.1% after Alberta’s energy regulator said the oil and gas producer had triggered a series of earthquakes in the province between November and March.

Meanwhile, a Statistics Canada report showed retail sales rose by 1.4% in January from December, on higher sales at motor vehicles and parts dealers, as well as gasoline stations.

Sales were seen to fall by 0.6% in February, the agency said in a flash estimate.

(Reporting by Johann M Cherian in Bengaluru; Editing by Pooja Desai)