TSX tumbles as global growth concerns deepen

Thu Oct 9, 2014 5:13pm EDT
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By John Tilak

TORONTO (Reuters) - Canada's main stock index dropped sharply on Thursday as worries about the health of the global economy hit investor sentiment and shares of energy producers dived as oil prices fell.

Sluggish data from Germany added to concerns about the global economic recovery that had been triggered earlier this week by a bearish global growth forecast from the International Monetary Fund.

Investors have of late become increasingly concerned about the European economy, with figures from Germany indicating that growth there has been faltering.

Weakness in shares of energy producers, reflecting sluggish oil prices, had the biggest negative influence on the index.

The Toronto stock market's benchmark TSX is down nearly 8 percent since hitting a record high last month.

“It looks like the selloff has taken a life of its own,” said Elvis Picardo, strategist at Global Securities in Vancouver, who said investors were worried about a potential slowdown in global growth.

“We haven't seen the r-word creep into the conversation yet, but we've seen a distinct economic stall in Japan, Germany and even Canada," he added, referring to the word "recession".

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed down 205.87 points, or 1.40 percent, at 14,460.60. Nine of the 10 main sectors on the index were in the red.   Continued...

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