Resource stocks led the benchmark index of the Toronto Stock Exchange sharply lower Thursday.

The S&P/TSX composite index tumbled 231.78 points, or 2%, at 11,285.76.

The heavyweight energy sector fell 2.5% as high U.S. crude oil inventories sparked fears of lower fuel demand.

Crude for November delivery fell US$3.09, or 4.5%, to close at US$65.89 a barrel on the New York Mercantile Exchange.

On the TSX, Canadian Natural Resources Ltd. fell 4.2%, while Suncor Energy Inc. fell 2%.

The materials group, home to mining shares, fell 2.2% as copper corrected to its lowest level in more than a month due to rising metals inventories and weak U.S. housing data.

Gold for December delivery fell $15.50, or 1.5%, to finish at US$998.90 an ounce on the Nymex.

In Toronto, gold miner Agnico-Eagle Mines plunged 4.4% to $69.25, and Teck Resources dropped 4% to $28.95.

Financials were also weak. Royal Bank of Canada fell 1.2%, Bank of Nova Scotia fell 2.3% and Manulife Financial Corp. fell 3.1%.

Among individual stocks, Research In Motion Ltd. fell 2.4% before it released its second quarter results after markets closed.

The BlackBerry maker reported earnings of $1.03 per share. However, RIM forecast third quarter sales that were lower than expectations.

The junior S&P/TSX Venture composite index fell 21.49 points, or 1.68%, to close at 1,256.36.

The Canadian dollar shed more than a cent falling to US91.82¢ from US93.01¢ at Wednesday’s close.

In New York, U.S. stocks fell on signs of weakness in housing and concern that the government might be easing stimulus efforts too soon.

The Dow Jones industrial average shed 41.11 points, or 0.42%, to 9,707.44. The S&P 500 slipped 10.09 points, or 0.95%, to 1,050.78. The tech-heavy Nasdaq composite index fell 23.81 points, or 1.12%, to close at 2,107.61.

IE