TSX slumps as U.S. selloff darkens mood

Thu Apr 10, 2014 6:26pm EDT
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By John Tilak

TORONTO (Reuters) - Canada's main stock index dropped on Thursday as a selloff in U.S. technology and biotechnology stocks hit investor sentiment and fueled declines in every major sector.

Further dampening the mood, data showing a significant fall in Chinese imports and exports suggested that a slowdown in the world's second-largest economy was taking hold.

The market brushed aside figures indicating the number of Americans filing new claims for unemployment benefits dropped last week to a near seven-year low.

Worries about Fed policy and a feeling that stock prices were getting extended have roiled markets over the past week and sparked a surge in volatility.

Those fears took center stage again on Thursday, a day after global equity markets rallied on comments from the Federal Reserve that helped ease concerns the U.S. central bank might adopt a more aggressive timetable for raising interest rates.

"There's a feeling that maybe stocks have run ahead of reality," said Fred Ketchen, director of equity trading at ScotiaMcLeod.

"The market is a little nervous today," he added. "The nervousness has brought out a raft of sellers who have decided it's better to take some money out of the market, sit on the sidelines and wait for things to calm down."

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed down 127.58 points, or 0.88 percent, at 14,308. It is up about 5 percent this year.   Continued...

A Bay Street sign, a symbol of Canada's economic markets and where main financial institutions are located, is seen in Toronto, May 1, 2013. REUTERS/Mark Blinch