Canada's main stock market in Toronto Monday fell to a new low in ten weeks, dragged down by a decline in energy after oil plunged on OPEC's inaction on a growing global glut.
The Toronto Stock Exchange's benchmark Standard & Poor's/ TSX Composite Index shed 315.94 points, or 2.37 percent, to settle at 13,042.83 points, the lowest closing level after Sept. 29.
All the major sectors suffered big sell-offs except Health Care, higher 1.19 percent. Leading the decline, energy dropped 5.92 percent after oil prices hit nearly seven-year lows Monday after the decision of the Organization of the Petroleum Exporting Countries (OPEC) last Friday to keep crude production at a high level, which will exacerbate the glut in the crude market.
The light, sweet crude for January delivery moved down 2.32 U.S. dollars to settle at 37.65 dollars a barrel on the New York Mercantile Exchange, while Brent crude for January delivery decreased 2.27 dollars to close at 40.73 dollars a barrel on the London ICE Futures Exchange.
Metals and mining tumbled 7.59 percent, while the most heavily weighed sector financials shed 1.78 percent as well. "After breaking the 14,000 level in August, TSX is technically showing bearish sign, and if the U.S. Federal Reserve hikes its benchmark interest rate next week, commodities will suffer further downward pressure, which will be negative for Canadian stock market in the short term," Fan Yang, Fellowship of Canadian Securities Institute (FCSI), told Xinhua on Monday.
The FCSI is the most senior credential in Canadian financial services. Oil and gas supplier Encana Corporation shedded 6.21 percent to 9.06 Canadian dollars, and metals miner Teck Resources Limited, shrunk 9.44 percent to 4.99 Canadian dollars. Canada's biggest lender Royal Bank of Canada was down 1.54 percent to 75.41 Canadian dollars per share.
According to a weekly report released by TD Economics on Friday, economic growth momentum in the fourth quarter(Q4) is losing stream, as exports faltered and unemployment rose.
The report estimated the real GDP growth in Q4 at annualized minus 1.0 percent. On the currency front, Monday witnessed the lowest level of the Canadian dollar since mid 2004 following the oil slump. It dropped sharply to 0.7400 U.S. dollar at 4 pm local time, compared with 0. 7476 U.S. dollar in the previous session.
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