TSX hits 10-month low as recession fears on rise
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 per cent, 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 per cent 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 10year 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 per cent as lockdowns in China to curb the spread of COVID-19 weighed on oil prices. U.S. crude oil futures settled 6.1 per cent lower at US$103.99 a barrel.
The materials group, which includes precious and base metals miners and fertilizer companies, lost 5.6 per cent. Gold was down 1.6 per cent at about $1,852 per ounce.
Shaw Communications Inc tumbled 7.2 per cent as Canada’s antitrust agency sought to block Rogers Communications Inc’s $26 billion deal to buy the company on the grounds that it would lead to less competition in the wireless industry.
Health care ended 7.1 per cent lower, including a decline of 18.9 per cent for the shares of Bausch Health Companies Inc, while technology lost 4.1 percent.