TSX tumbles to three-month low as sentiment sours

Thu Sep 25, 2014 5:17pm EDT
 
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By John Tilak

TORONTO (Reuters) - Canada's main stock index dropped 1.5 percent on Thursday, its worst fall in 7-1/2 months, as negative sentiment for equities and choppy commodity prices helped drag down shares in most major sectors.

Investors brushed aside data showing that new orders for capital goods by U.S. businesses bounced back in August, while separate figures showed a smaller-than-expected rise in weekly jobless claims.

The benchmark TSX index fell for a fifth straight session to hit a three-month low, led by declines in the heavyweight energy and financial sectors.

Market volatility shot up and commodity prices remained choppy. A surge in the U.S. dollar to a four-year high was also seen as a negative for equities.

“It's one of those days when you wake up and look at all the headlines, and they seem very bad for stocks,” said Marcus Xu, president and portfolio manager at M.Y. Capital Management Corp in Vancouver. “The market seems to want to take a break here and sell off.”

He said that even though market fundamentals are still intact, the market could go even lower before rebounding. He added that he expects the Canadian market to provide slightly better returns than U.S. stocks this year.

The Toronto Stock Exchange's S&P/TSX composite index closed down 226.97 points, or 1.5 percent, at 14,893.57. Eight of the 10 main sectors on the index were in the red.

Financials, the index's most heavily weighted sector, dropped 2 percent. Toronto-Dominion Bank shed 2.8 percent to C$54.85, and Bank of Nova Scotia lost 1.7 percent to C$68.91.   Continued...

 
A man walks past an old Toronto Stock Exchange (TSX) sign in Toronto, June 23, 2014.   REUTERS/Mark Blinch