TORONTO (Bloomberg) - Canadian stocks fell for the first time in five days, led by financial companies, after US mortgage delinquencies increased and Manulife Financial Corp. said it plans to sell stock to build up capital.

Manulife, North America's biggest insurer by market value, plunged 6.1 percent after saying it will sell as much as C$2.88 billion ($2.7 billion) in shares. Toronto-Dominion Bank, Canada's second-largest lender, lost 0.7 percent as bank stocks dropped. EnCana Corp., the country's second-largest energy company by market value, slipped two percent as oil fell below $78 a barrel.

The Standard & Poor's/TSX Composite Index slid 52.39 points, or 0.5 percent, to 11,600.3. The S&P/TSX had risen 6.8 percent this month through Wednesday as gold, copper and oil producers rallied on a weakening US dollar. The index retreated yesterday after the Mortgage Bankers Association of America said the mortgage-delinquency rate rose 0.4 percentage point to 9.6 percent in the third quarter.

"While things have improved quite significantly there, there still is a lot of exposure to these mortgage-backed securities," said Laura Wallace, who helps oversee C$275 million as a portfolio manager at Coleford Investment Management in Toronto. "You need to see an improvement in the housing markets in order to have more confidence about the overall financial situation."

Financials, the largest industry in the Canadian benchmark index, have jumped 36 percent this year compared with a 17 percent advance for their peers in the S&P 500. Canadian institutions didn't make writedowns as deep as their US counterparts and have not needed any government bailouts.

Manulife, owner of US insurer John Hancock, said it will sell shares at C$19 to build up capital and finance possible takeovers. The Toronto-based company sank 6.1 percent to C$18.95, the lowest closing price since April 9.

The sale of additional shares may dilute earnings for existing shareholders.

Great-West Lifeco Inc., Manulife's largest Canadian rival, decreased 0.7 percent to C$23.92. Industrial Alliance Insurance and Financial Services Inc. retreated 1.2 percent to C$28.61.

"If there's something that Manulife is seeing, it's likely to affect the other insurers as well," Ms Wallace said. "Manulife may be raising money in the expectation that there will be increased capital requirements coming from the regulators over the next few months."

An index of Canadian banks fell, halting a six-day streak of gains. Toronto-Dominion, owner of TD Bank in the US, decreased 0.7 percent to C$67.81. Royal Bank of Canada, the country's biggest lender, dropped 0.8 percent to C$57.55.

Crude oil dropped 2.7 percent in New York to $77.46 a barrel as a stronger US dollar lessened the appeal of commodities as a currency hedge. Suncor Energy Inc., which bought Petro-Canada in August, declined 0.8 percent to C$38.25. EnCana, which plans to spin off its oil operations, slipped two percent to C$56.67. Canadian Natural Resources Ltd. dropped 1.2 percent to C$71.09.

New Gold Inc., which operates in the US, Mexico and Australia, tumbled 15 percent to C$3.85 after a Mexican court revoked a mine's environmental-impact statement, forcing the mine to close.

Fertiliser producer Migao Corp. plunged 7.1 percent, the most in three months, to C$7.11. The company, which operates in China, said it will sell at least 4.9 million shares at C$7.10 a share, in part to increase manufacturing capacity.

Noront Resources Ltd., which explores for minerals in the province of Ontario, surged 39 percent to C$2.08 after reporting favorable drilling results. Noront shares have tripled this year.