TSX tumbles as emerging-market fears grip investors
By John Tilak
TORONTO (Reuters) - Canada's main stock index recorded its biggest single-day drop in seven months on Friday as fears over growth in China and expectations that the U.S. Federal Reserve will scale back its stimulus program next week hit emerging-market assets and dented investor sentiment.
The fears about how developing markets will handle the Fed rollback, combined with soft economic data from China, pushed down the prices of some commodities, including oil and copper.
In turn, the resource-sensitive Toronto Stock Exchange benchmark index fell for a second straight session and ended the week 1.2 percent lower. The index also hit its weakest level in a week.
Ahead of Friday's selloff, the market had been gaining steadily since the start of the year and hit a 2-1/2-year high on Thursday.
"Markets are at pretty lofty levels and quite stretched. So if you inject a little bit of risk aversion globally, it could lead to a pullback," said Youssef Zohny, portfolio manager at Stenner Investment Partners, a unit of Richardson GMP.
He said some of the issues that have been thrown up could be in the spotlight for the next several weeks.
The benchmark S&P/TSX composite index .GSPTSE was down 215.21 points, or 1.54 percent, at 13,717.76.
"It's clearly not positive for Canada because some emerging markets account for a lot of the commodity purchases," said Lorne Steinberg, president of Lorne Steinberg Wealth Management. Continued...