TSX, Dow tumble on global growth worries
It was an ugly day on stock markets in Canada, the U.S. and around the world Thursday as worries about weakness in China and other emerging markets intensified and oil prices remained near six-year lows.
The main benchmark index of the Toronto Stock Exchange fell for the ninth time in 11 trading sessions as the heavily weighted financial and energy groups lost more ground.
The S&P/TSX composite index dropped below the 14,000 level and closed at a new low point for the year, tumbling 300 points, or 1.9 per cent, to 13,737.
It was the second straight day of triple-digit losses for the TSX and the fourth losing session in a row.
All groups were down with the exception of materials, as gold stocks benefited from a $25 US per ounce jump in the price of the precious metal on safe-haven buying. The energy group shed 2.5 per cent; financials lost 1.7 per cent.
The main TSX index has lost more than 10 per cent of its value in the last year. The energy and financial sectors, which together account for just over half of the weight of the index, get much of the blame.
Oil prices, which have plunged by more than 60 per cent in that time, have left the shares of many energy producers sitting at 52-week lows.
Bank shares have weakened as the market worried about the banks' exposure to the beleaguered commodities sector.
Markets down around the world
Colin Cieszynski, chief market strategist at CMC Markets Canada, says a broad-based market correction may be underway. "I think there's a growing feeling that the world economy is starting to teeter," he tells CBC News.
"There's a lot of weakness out there and over time, that can impact on corporate earnings." He also cited seasonal factors for the current slide, pointing out that the mid-August to mid-October period is often a weak time for stocks.
In New York, the Dow Jones industrial average plunged 358 points, or 2.1 per cent, to 16,991. This was the first close for the Dow below 17,000 since last October and was the biggest one-day percentage drop for the Dow in almost 18 months.
The broader S&P 500 index shed 2.1 per cent to close at a five-month low, while the Nasdaq dropped 2.8 per cent.
"The largest issue is certainly the fact that we don't know how much the Chinese economy is slowing," said Art Hogan, chief market strategist at Wunderlich Securities in New York, in remarks quoted by Reuters.
China's cooling economy and its recent currency devaluations were weighing on markets in North America and elsewhere. China's stock markets in Shanghai and Shenzhen both lost more than three per cent on Thursday and that rattled investors around the world.
Most European markets ended lower on Thursday. The main London stock index hit its lowest level since January and the main German stock index is having its worst month in three years.
Stocks in Japan fell almost one per cent.
