TSX falls by most in nearly two years on recession fears

·2 min read
FILE PHOTO: A Bay Street sign, the main street in the financial district is seen in Toronto

By Fergal Smith

TORONTO (Reuters) - Canada's main stock index on Monday fell below the 20,000 level for the first time in 10 months, as shares of Shaw Communications tumbled and rising worries about the potential for a global economic slowdown pressured resource shares.

The Toronto Stock Exchange's S&P/TSX composite index ended down 633.59 points, or 3.1%, at 19,999.69, its biggest decline since June 2020 and its lowest closing level since July last year.

The resource sectors has the biggest losses. That's a sign that investors are worried about the economic outlook, said Michael Sprung, president at Sprung Investment Management.

"Everything is pointing towards a recession at least in the minds of investors currently," Sprung said.

The TSX has fallen nearly 10% from a record intraday high just last month.

U.S. stocks also ended sharply lower, led by declines in mega-cap growth shares as the benchmark 10-year yield hit fresh 3-1/2 year highs and investors grew more concerned about the interest rate outlook.

The Toronto market's energy group fell 7.1% as lockdowns in China to curb the spread of COVID-19 weighed on oil prices. U.S. crude oil futures settled 6.1% lower at $103.99 a barrel.

The materials group, which includes precious and base metals miners and fertilizer companies, lost 5.6%. Gold was down 1.6% at about $1,852 per ounce.

Shaw Communications Inc tumbled 7.2% as Canada's antitrust agency sought to block Rogers Communications Inc's $16 billion deal to buy the company on the grounds that it would lead to less competition in the wireless industry.

Healthcare ended 7.1% lower, including a decline of 18.9% for the shares of Bausch Health Companies Inc, while technology lost 4.1%.

(Reporting by Fergal Smith; Additional reporting by Amal S in Bengaluru; Editing by Sandra Maler)

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