Toronto Stock Exchange posts triple digit decline following plunge in China
The Toronto Stock Exchange registered a triple-digit loss Monday, led by the resource sectors, following a major sell-off in the Chinese market and weakness in oil.
The S&P/TSX composite index plunged 184.84 points to close at 14,001.37, while the loonie lost 0.06 of a cent at 76.66 cents US.
The move in Toronto came after the Shanghai share index posted its biggest one-day plunge since February 2007.
Nearly all of the sectors of the TSX closed lower, with the exception of health care. Resources fared especially poorly, with the gold sector losing more than four per cent, while metals and mining lost 3.7 per cent, materials lost 3.1 and energy closed 2.8 per cent lower.
China is a major importer of metals and oil, which are heavily weighted sectors on the TSX.
The September contract for crude oil fell 75 cents to US$47.39, while the August natural gas contract gained 1.3 cents at US$2.789.
Gold — often seen as a safe haven for investors during times of economic turmoil — closed higher, with the August contract gaining US$10.90 to US$1,096.40.
Brian Belski, chief investment strategist at BMO Capital Markets, says the reaction in Canada to the plunge in China demonstrates a broader issue — the degree to which investors around the world are depending on China as a growth engine.