TSX continues its post-Fed drubbing

TORON TO • The Toronto stock market piled on more losses Monday as traders continued to sell off risky assets like equities and commodities amid signs that the U.S. Federal Reserve is getting ready to cut back on stimulus and more worry about China’s economic rebound.

The S&P/TSX composite index closed off the worst levels of the session, coming back from a 237-point plunge to finish down 158.8 points at 11,836.86. The loss came on top of a slide of 192 points, or 1.57%, last week.

The loonie felt more the pressure from the greenback but was well off session lows as strength in the greenback moderated mid-afternoon and oil prices rose sharply. It closed down US0.27¢ to US95.37¢, after earlier falling as low as US94.75¢, its lowest since early October 2011.

U.S. indexes also finished in the red but also well off session lows with the Dow Jones industrials closing down 139.84 points at 14,659.56 on top of a 1.8% slide last week. Nasdaq gave back 36.49 points to 3,320.76 and the S&P 500 index lost 19.34 points to 1,573.09.

Markets started to nosedive last Wednesday after the Federal Reserve signalled it feels economic data has improved to a point at which it could start to wind up its bond-buying program this year and wrap it up by the middle of next year.

Central banks have kept interest rates low by various means to stimulate the economy — providing a major boost to U.S. stock markets.