TSX slumps to eight-month low on U.S. data, oil prices

Wed Oct 15, 2014 4:54pm EDT
 
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By John Tilak and Leah Schnurr

TORONTO (Reuters) - Canada's main stock index dropped on Wednesday to its lowest level in eight months, as sluggish U.S. economic data fed concerns about the global economy and oil prices slid again.

The benchmark TSX has fallen into official correction territory, down more than 11 percent since hitting a record high last month. The index has racked up a decline of more than 1 percent in the last five of six sessions.

The declines on Bay Street were part of a global equity rout as investors fretted about a drop in Chinese inflation and the global economy. Markets were also trying to gauge when the Federal Reserve will start to raise U.S. interest rates.

News that a second Texas nurse has contracted Ebola added to the overall risk aversion and investors fled to safer assets.

A fall in U.S. retail sales in September and a drop in U.S. producer prices raised questions about the strength of the recovery in the world's biggest economy.

"The worry is that the only bright spot, which is the U.S. economy, could be dragged down," said Marcus Xu, portfolio manager at M.Y. Capital Management Corp in Vancouver.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended down 166.80 points, or 1.19 percent, at 13,869.88. All of the 10 main sectors on the index were in the red.

The financial sector, which had been a market leader to the upside, was one of the worst hit, down 2.5 percent. A handful of banks were the biggest drags on the index, including Toronto Dominion Bank (TD.TO: Quote), which lost 2.6 percent to C$51.24, while Royal Bank of Canada (RY.TO: Quote) dropped 1.9 percent to C$77.26.   Continued...

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