TSX sinks to lowest since Feb 2014 on global growth worry

Fri Aug 21, 2015 5:59pm EDT
 
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By Solarina Ho and Alastair Sharp

TORONTO (Reuters) - Canada's main stock index sank to its lowest in 18 months on Friday, capping a week of rapid retreat on persistently grim global sentiment following more disappointing data out of China.

Global equity markets plummeted toward their worst week this year, while the beating in commodities continued as data out of China showed manufacturing in the country was slowing at the fastest pace since the financial crisis in 2009. [MKTS/GLOB]

The commodities-heavy TSX took another drubbing, with energy stocks falling 1.5 percent and materials sliding 2.9 percent. The hefty financials group, whose banks report quarterly results next week, fell 1.9 percent.

"There's not a lot of positive things that support the equity price," said Marcus Xu, a portfolio manager at M.Y. Capital Management Corp in Vancouver. "That's probably why people are getting a little panicked."

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed down 263.33 points, or 1.92 percent, at 13,473.67. It lost almost 6 percent in the week, its worst weekly slump since September 2011.

Decliners outnumbered advancers by 224 to 21, and the index posted two new 52-week highs and 70 new 52-week lows.

"We're really breaking some really key levels. It's a sign that we're in a very severe correction," said John Johnston, chief strategist at Davis-Rea. "It's being driven by a continued slowdown in the global production cycle, which is so important for the demand for commodities."

He said weakness in emerging markets could drag the global economy into a recession.   Continued...

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