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MARKETS LIVE BLOG:

STOCKS CLIMB AS DOW POSTS 8TH STRAIGHT WIN

Fed's Michelle Bowman echoes higher-for-longer mantra for interest rates

TSX drops 1 percent as Scotiabank, energy shares drag

Reuters
A man walks past an old Toronto Stock Exchange (TSX) sign in Toronto, June 23, 2014. REUTERS/Mark Blinch

By John Tilak

TORONTO (Reuters) - Canada's main stock index declined on Tuesday as a sharp drop in the price of oil sent energy shares tumbling and Bank of Nova Scotia (Toronto:BNS.TO - News) slipped after the company announced job cuts.

Scotiabank, Canada's No. 3 lender, said it was cutting about 1,500 jobs and booking a pre-tax charge of C$451 million ($396 million), mainly because of bets that have soured in the Caribbean and South America. Its shares fell 2.3 percent to C$67.19.

Oil prices slumped to multiyear lows after major exporter Saudi Arabia cut sales prices to the United States, dragging down shares of energy producers. Energy shares fell 4.2 percent and are down 28 percent since the middle of June.

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“Who knows where the bottom is, but that doesn’t mean you shouldn’t be looking at large companies with financial strength, such as Suncor Energy (Toronto:SU.TO - News),” said Michael Sprung, president of Sprung Investment Management.

Investors should choose “companies that have the balance sheet to withstand a period where things are likely to remain unsettled for some time,” he added.

“We’re seeing a buying opportunity. It’s just that your investment horizon is going to be stretching out for a few years.”

The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) closed down 147.19 points, or 1.01 percent, at 14,390.43. Five of the 10 main sectors on the index fell.

Among energy shares, Canadian Natural Resources Ltd (Toronto:CNQ.TO - News) lost 3.9 percent to C$36.80, and Suncor dropped 3.5 percent to C$37.24.

TransCanada Corp (Toronto:TRP.TO - News) was little changed after the pipeline company posted a stronger-than-expected third-quarter profit, helped by higher earnings from its Keystone and Mexican pipelines.

Talisman Energy Inc (Toronto:TLM.TO - News) tumbled 11.9 percent to C$6.10 after the company reported quarterly results.

Financials, the index's most heavily weighted sector, edged lower as Scotiabank’s decline more than offset a gain in shares of Royal Bank of Canada (Toronto:RY.TO - News), which climbed 0.4 percent to C$80.32.

(Editing by James Dalgleish and Steve Orlofsky)