TSX flirts with correction territory as commodities fall
Canada's main stock index fell on Tuesday to its lowest level in 10 months as commodity prices fell and global equity markets remained volatile.
The Toronto Stock Exchange's S&P/TSX composite index ended down 109.63 points, or 0.6 per cent, at 19,890.06, its lowest closing level since July 2021.
It was down nearly 10 per cent from its March 29 closing record high. A correction is confirmed when an index closes 10 per cent or more below its record closing level.
“The commodity trade is weighing on the TSX in addition to the equity volatility that we are seeing in other places around the world,” said Philip Petursson, chief investment strategist at IG Wealth Management.
Wall Street closed higher but trading remained volatile as investors worried about the economic impact of tighter coronavirus lockdowns in China and expected aggressive interest rate hikes to tackle inflation.
The Toronto market has fallen 6.3 per cent since the start of the year, which is much less than for some other major global benchmarks. The S&P 500 is down 16.1 per cent.
“At this point now it is starting to look overdone,” Petursson said. “We have seen an adjustment in valuations far beyond what I think rates and inflation would justify.”
The energy group fell 0.4 per cent, with Suncor Energy Inc down 1.3 per cent despite exceeding analysts' estimates for first-quarter profit.
U.S. crude prices settled 3.2 per cent lower at US$99.76 a barrel as the market balanced demand concerns with impending European Union sanctions on Russian oil, while gold was down 0.9 per cent at about US$1,837 per ounce.
In New York, the Dow Jones industrial average was down 84.96 points at 32,160.74. The S&P 500 index ended up 9.81 points at 4,001.05, while the Nasdaq composite was up 114.42 points at 11,737.67.
Reuters