After hitting its worst level in five weeks on Wednesday, Canada’s main stock index was heading for its fifth straight loss today.
Since Friday, August 26, when the U.S. Federal Reserve chief Jerome Powell warned of imminent aggressive rate hikes, the Toronto Stock Exchange’s S&P/TSX composite index and the American stock indexes have been closing in negative territories. The recent fall in crude oil and gold prices has also not helped matters, with energy and material stocks suffering heavy losses.
On Wednesday, the TSX lost 182.09 points, closing at 19,330.81. The story was the same south of the Canadian border, where stock markets also fell for the fourth day. The Dow Jones industrial average closed at 31,510.43, slimmer by 280.44 points. The S&P 500 index was down 31.16 points at 3,955.00, while the Nasdaq composite finished 66.94 points lower at 11,816.20.
When the market opened today, the TSX continued in red, plummeting further southwards. At 9:40 a.m. ET – ten minutes after the market opened – the Toronto Stock Exchange’s S&P/TSX composite index had already dropped to 19,146.28, losing 184.53 points, or 0.95 per cent.
At 10:40 a.m. ET, the TSX dropped further by 266.3 points, or 1.38 per cent, at 19,064.51. The energy sector lost 2 per cent, with oil prices still falling. The financials sector shed 1.5 per cent, while the industrials sector wet down 0.9 per cent.
The poor performance of the index continued into the afternoon. At 12.30 p.m. ET, it had dropped to 19,038.91, losing 291.90 points, or 1.51 per cent.
The top-performing stocks were Turquoise Hill Resources Ltd., with had gained 13.68 per cent; Bausch Health Cos. Inc., which had gained 3.81 per cent; and Alimentation Couche Tard Inc., with a gain of 2.75 per cent. Conversely, the least-performing stocks were First Quantum Minerals Ltd., losing 9.81 per cent; Dye & Durham Ltd., losing 9.25 per cent; and Energy Fuels Inc., losing 8.81 per cent.
At that same time, it showed that the index had lost 5.61 per cent in five days and 2.74 per cent in one month. In the past three months, the TSX had lost 9.46 per cent. Since the beginning of the year, the index had lost 10.28 per cent, while it had lost 8.43 per cent in the past year.
The S&P 500 was also down 3,918.11, shedding 36.89 points, or 0.93 per cent. The DOW was down 31,394.59, losing 115.84 points, or 0.37 per cent.
The loonie was down $0.0017, or 0.2207 per cent, exchanging at US$0.7594.
Crude oil was lower by US$ 2.16, or 2.41 per cent, selling at US$87.39 per barrel.
The report released on Wednesday by Statistics Canada about the growth in the Canadian economy did not help to douse worries in the system. According to Statistics Canada, the Canadian economy recorded an annual growth rate of 3.3 per cent in the second quarter of the year, which fell short by far of the projected rate of 4.6 per cent annualized growth.
In addition, the agency noted that an early reading for July indicates the possibility of a contraction of 0.1 per cent.
Even though the figures released by Statistics Canada about the Canadian economy indicated that it fell below expectations, they still showed that the economy grew for a fourth consecutive quarter, buoyed by a rise in businesses and household spending. In the first quarter of 2022, the economy had grown at an annual rate of 3.1 per cent.
The Bank of Canada will hold its policy meeting next week and make an announcement on interest rates as regards its attempt to rein in inflation. Whatever decision it takes will have corresponding effect on the economy.
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