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Tuesday, November 29, 2022

TSX hits 19-month low as global recession risk weighs

TSX hits 19-month low as global recession risk weighs
© Reuters. The Art Deco facade of the original Toronto Stock Exchange building is seen on Bay Street in Toronto, Ontario, Canada January 23, 2019. REUTERS/Chris Helgren

By Fergal Smith

TORONTO (Reuters) – Canada’s main stock index fell on Tuesday to a 19-month low, tracking a fall in world markets, as worries about a global recession unnerved investors returning from a long weekend, with resource, technology and financial stocks among the big losers.

The Toronto Stock Exchange’s S&P/TSX composite index ended down 366.45 points, or nearly 2%, at 18,216.68, its fourth straight day of declines and the lowest closing level since March 2021.

The index was closed on Monday for the Thanksgiving Day holiday.

The S&P 500 and Nasdaq also ended lower on Tuesday, with indications from the Bank of England that it would support the country’s bond market for just three more days adding to market jitters.

Investors were already on edge ahead of a key U.S. inflation report this week that could cement additional interest rate hikes by the Federal Reserve.

“I think we are seeing the rate hikes really in full effect now,” said Allan Small, senior investment adviser at the Allan Small Financial Group with iA Private Wealth.

“The fear is that because the rate hikes have a lagging effect on the economy, we will not feel the full effect of these rate hikes until perhaps 3-6 months down the road.”

The International Monetary Fund on Tuesday cut its global growth forecast for 2023, warning that conditions could worsen significantly next year.

China, the world’s largest consumer, stepped up COVID-19 restrictions after a flare-up in infections, pushing oil, gold and other metals prices lower on worries about the hit to demand.

The energy sector dropped nearly 4% as oil prices settled down $1.78 at $89.35 a barrel, while the materials sector, which includes precious and base metals miners and fertilizer companies, ended 1.4% lower.

Heavily-weighted financials lost 2.3% and technology was down nearly 3%.



Source: Investing.com

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