TSX nears three-week low on emerging market fears
By John Tilak
TORONTO (Reuters) - Canada's main stock index dropped on Monday to its lowest in almost three weeks, hit by a selloff in emerging market equities that was triggered by concerns about Chinese economic growth and the U.S. Federal Reserve's stimulus program.
Data out of China has shown signs of weakness in the world's second-biggest economy and weighed on global equities.
Investors also eyed the U.S. Federal Reserve ahead of a policy meeting this week to decide whether the central bank will further scale back its stimulus measures.
A recent slump in the Turkish lira and declines in other emerging market currencies and equities that began last week spread to Canadian stocks as well, causing investors to avoid riskier assets.
The Toronto market traded in the red for a third straight day, following its biggest single-day drop in seven months in the previous session, and turned negative for the year.
"Investors are suddenly fixated on the risk aspect, and anything now seems like a looming crisis," said Elvis Picardo, strategist and vice president of research at Global Securities in Vancouver.
"If the emerging markets situation worsens, it does throw a spanner into the works, but it's too early to tell," he added. "Overall the feeling seems to be that this is a mere blip, and not a very big correction."
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed down 135.47 points, or 0.99 percent, at 13,582.29, after touching 13,520.51, its lowest since January 7. Continued...