TSX tumbles 1.5 percent, hit by global jitters
By Alastair Sharp
TORONTO (Reuters) - Canada's main stock index slumped almost 1.5 percent on Wednesday, caught up in broader risk aversion prompted by a selloff in equities in China and hurt by a fall in the price of oil.
The declines on Bay Street were widespread and included traditional safe havens such as financials, healthcare and consumer stocks that had found favor with investors last week.
"It's pretty hard not to be concerned when you see what's happening with the usual culprits, between Europe and the meltdown in China, oil prices where they are and the fact that there's a possibility we could be in a technical recession in Canada," said Michael Sprung, president at Sprung Investment Management Inc. "There's not a whole lot to make people happy."
The energy sector dragged, shedding 2.2 percent as U.S. crude oil prices CLc1 fell. Shares of gold companies were among the few gainers as gold prices XAU= edged higher.
But the TSX was unable to overcome the global flight to safety after China's stock market resumed its rout, raising concerns that the turmoil will destabilize China's economy.
The volatility in China exacerbated nervousness over whether Europe would act to keep Greece in the euro zone. The country's prime minister pleaded in the European Parliament for a fair deal for Greece.
"It's still Greece and China all over the headlines and what those implications are," said Paul Hand, managing director at RBC Capital Markets.
"Canada is kind of a bystander in all this, collateral damage in the sense that we are impacted by the global economy." Continued...