Canada's main stock market in Toronto nosedived to a nearly two-year low Monday, dragged down by the slump in resources and medical shares. With losses seen across the board, the Toronto Stock Exchange's benchmark Standard & Poor's/TSX Composite Index tumbled 373.99 points, or 2.8 percent, to 13,004.58 points on the closing bell, the lowest level after Oct. 17, 2013, when the index settled at 13, 036.36 points.
The index was hammered down when the resources led the decrease with the mining sector plunging 9.24 percent and the energy sector shedding 2.64 percent, respectively. The falling commodities prices mostly contributed to the fall as the light, sweet crude oil for November delivery moved down 1. 27 U.S. dollars to settle at 44.43 dollars a barrel, and the most active gold contract for December delivery lost 13.9 U.S. dollars to settle at 1,131.7 dollars per ounce on the New York Mercantile Exchange Monday.
Analysts believed that commodities prices will continue suffering more turbulence under pressure from a likely rate hike by the U.S. Federal Reserve during the rest of this year, which is expected to make dollar-denominated assets more expensive for investors. "Safe-haven demand has returned alongside global economic uncertainty and the decision by the Fed to delay its first rate hike, given the potential for an even stronger U.S. dollar and weaker emerging-market currencies," according to Patricia Mohr, an economist from Scotiabank.
The copper producer First Quantum Minerals Ltd. vapored 14.99 percent to 4.65 Canadian dollars (about 3.47 U.S. dollars) a share, while Canadian Oil Sands Ltd. dropped 7.87 percent to 6.09 Canadian dollars per share. The TSX index was also weighed when Canada's biggest drug maker Valeant Pharmaceuticals International Inc. fell 16.3 percent to 221.81 Canadian dollars a share after Democrats in the U.S. House asked to subpoena the company for documents relating to drug price increases.
And it is reported Monday that the politicians said prices of Valeant's heart drugs Nitropress and Isuprel increased by 212 percent and 525 percent from the day when Valeant acquired the rights to sell them. Other sectors in the red included Info Tech, down 2.07 percent, and Financials, lower 1.31 percent. On the currency front, the Canadian dollar on Monday fell to 0. 7466 U.S. dollar, when compared with 0.7510 U.S. dollar Friday.
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