* TSX down 132.74 points, or 0.85 percent, to 15,516.80
* Seven of the TSX's 10 main groups move lower
* Financials off 1.7 pct, energy group down 1.6 pct
(Updates share moves and adds more details on Home Capital)
TORONTO, April 27 Canada's main stock index fell
nearly 1 percent on Thursday, dragged down by heavyweight
banking stocks after an alternative lender's funding troubles
raised concerns about the health of the housing market.
Home Capital Group Inc, which has been hit by a
series of adverse news last month, said it had hired bankers to
help it secure additional funding and size up its strategic
options, as the subprime lender reported a further sharp decline
in its assets amid a security regulator's probe into its
"It's a crisis affecting a company which happens to be
operating in the mortgage market," said Fred Demers, chief macro
strategist at TD Securities, who did not think there was a risk
of contagion like the one experienced during the 2008 financial
Home Capital shares popped 25.0 percent to C$7.49,
offsetting some of Wednesday's 60 percent plunge, but the
broader financial group - which accounts for a third of the
index's weight - fell 1.7 percent and touched four-month lows.
Royal Bank of Canada, the country's biggest bank,
fell 2.0 percent to C$93.60, while Toronto-Dominion Bank
lost 2.4 percent to C$64.20 and Bank of Nova Scotia
shed 2.7 percent to C$75.35.
Home Capital's funding woes come at a time when federal and
provincial governments are trying to cool Toronto's red-hot
property market through a series of measures. The runaway prices
have attracted comments from banks CEOs that the market could
correct, which in-turn could hurt lender's earnings growth.
Canada's federal housing agency said on Wednesday that
Toronto still faces price acceleration, overvaluation and
At 3:35 p.m. ET (1935 GMT), the Toronto Stock Exchange's
S&P/TSX composite index fell 132.74 points, or 0.85
percent, to 15,516.80.
The energy group - which account for another 20 percent of
the index's weight - retreated 1.6 percent as oil prices fell on
news that two key oilfields in Libya had restarted, pumping
crude for export into an already bloated market.
Canadian Natural Resources Ltd fell 3.7 percent to
C$43.41 and Encana Corp also shed 1.8 percent to
Canada's largest oil and gas company, Suncor Energy Inc
advanced 0.3 percent to C$41.75 after reporting
Fertilizer company Potash Corp of Saskatchewan
gained 2.4 percent to C$23.21 after beating profit expectations
and upping its outlook.
Its rival and planned merger partner Agrium
advanced 2.3 percent to C$129.39.
(Reporting by Alastair Sharp and Solarina Ho; Editing by Chizu
Nomiyama and Lisa Shumaker)