CANADA STOCKS-TSX retreats on commodity price drop
*TSX sinks 7 pct; erases Friday's 5.9 pct rise
*Energy shares fall as oil falls below $51 a barrel
*Canadian economy grows more than expected in 3rd qtr
(Adds quotes, details)
TORONTO, Dec 1 (Reuters) - The Toronto Stock Exchange's main index tumbled on Monday morning, after a six-day streak in positive territory, in a broad selloff that was led by energy shares as oil prices dropped sharply.
Stocks that helped pull the market lower included oil company EnCana Corp (ECA.TO), down 10.9 percent at C$53.44, and miner Goldcorp Inc (G.TO), which sank 12.6 percent to C$30.59.
The energy sector fell 10.2 percent as oil dropped below $51 a barrel after OPEC decided to wait until mid December to make another cut in output. [ID:nSP341852]
Weakness in metals prices helped to push down the mining-heavy materials sector, which was down 9.6 percent.
"All we've done is retrace, basically, Friday's gains," said Julie Brough, vice president at Morgan Meighen & Associates, noting volumes were thin so any movement on the upside didn't have a lot of muscle behind it.
"Oil is off because OPEC has decided not to reduce production, which is, of course, weighing heavily on the oil stocks," she said. "It just means there is going to be a lot of supply in the system. Demand has been dropping and supply is constant."
At around 11:15 a.m. (1615 GMT), the S&P/TSX composite index .GSPTSE was down 659.96 points, or 7.12 percent, at 8,610.66, with all of its 10 main groups in the red.
The drop followed European [MKTS/GLOB] and U.S. stocks lower and erased the TSX's 5.9 percent gain on Friday.
In addition to earlier data showing slumping manufacturing activity in China and Europe, the Toronto market was pushed lower by gloomy U.S. manufacturing data, said Steve Ibel, institutional equities trader at Beacon Securities, in Halifax, Nova Scotia.
"Our economy is driven in a large part by the U.S.," he said. "Weaker manufacturing numbers really don't bode well for Canada."
U.S. factory activity fell in November to its weakest level since the 1981-82 recession, an industry report said on Monday. [ID:nN01504107]
Last week, the Toronto index rose nearly 14 percent, leading some analysts to speculate the market was trying to find a bottom.
Before going higher, however, the TSX may have to retest lower levels of around 7,700 reached in November, Ibel said.
"We have to retest our last low there and that's when we might be able to form a bottom," he said. "I think we're still in for a bit more weakness here."
Financials fell 6.8 percent with Manulife Financial (MFC.TO) down 12 percent at C$21.11, and Royal Bank of Canada (RY.TO) down 7.4 percent at C$39.97.
In economic news, Canada's economy grew faster than expected in the third quarter, expanding 1.3 percent on an annualized basis after stagnating in the first half of the year, Statistics Canada said. [ID:nN01254034] ($1=$1.24 Canadian) (Reporting by Jennifer Kwan; editing by Peter Galloway)
