Friday, 21 August 2015 04:27
TORONTO: Canada’s main stock index sank more than 2 percent on Thursday, hitting the lowest level of the year, as investor concern about prospects for global economic growth continued to cast a pall over markets.
The TSX index suffered its ninth loss in 11 sessions, with most of its main sectors giving up more than 1.5 percent. The healthcare group lost nearly 5 percent.
“The selling is indiscriminate, it’s panic-driven, and it doesn’t help that the U.S. indices have also turned soft over the past month,” said Elvis Picardo, strategist and vice president of research at Global Securities in Vancouver.
The day’s move was driven by the recent drop in oil prices, as well as diving Chinese equity markets, he added, while volatility in foreign exchange markets has also been spilling over to equities.
Royal Bank of Canada was among the biggest decliners on the index, shedding 2.2 percent to C$ 74.08. Toronto-Dominion Bank followed, declining 2 percent to C$ 50.91.
The index’s hefty financial group, which has been squeezed by a low interest-rate environment and its close ties with commodities-related companies, retreated 1.9 percent to its lowest level since the end of January. Banks will report quarterly earnings next week.
The Toronto Stock Exchange’s S&P/TSX composite index finished down 299.63 points, or 2.13 percent, at 13,737.
The next level to watch will be around 13,650, Picardo said. “It looks like the TSX is making a beeline for that.”
Declining issues outnumbered advancers on the TSX, for a 3.62-to-1 ratio on the downside, with stocks on the index posting two new 52-week highs and 50 new lows.
Energy stocks, which have fallen more than 15 percent through eight straight sessions of declines, were trading at the lowest levels since 2004, down 2.6 percent.
In the sector, Enbridge Inc fell 3.2 percent to C$ 52.13, while Suncor Energy gave up 2.7 percent to C$ 34.22.
U.S. crude prices, which plunged as low as $ 40.21 a barrel on worries of a global glut and softening demand, settled just above $ 41 a barrel.
The materials group was the lone gainer among the index’s top 10 sectors, rising 0.5 percent as gold miners were burnished by bullion prices at five-week highs on safe-haven buying.
The always volatile Valeant Pharmaceuticals International Inc stock tumbled 6.7 percent to C$ 298.75 after the company said it would buy Sprout Pharmaceuticals, maker of the first approved treatment for low sexual desire in women, for about $ 1 billion plus milestone payments.
