TORONTO (CP) — The Toronto stock market posted a triple-digit decline Thursday, while the loonie fell by more than half a cent against the greenback.
Toronto’s S&P/TSX composite index closed down 101.13 points at 14,238.40.
Allan Small, senior investment adviser at Holliswealth, said investors are dealing with a “malaise” that seems to have gripped the Canadian economy.
“There doesn’t seem to be much positivity coming out of Canada,” he said. “I just think it’s an overall negativity in our markets here.”
Small pointed to the continuing oil slump, talk about a potential recession for Canada in the first half of the year and a string of disappointing economic indicators, including mediocre job numbers released last Friday.
“With all of that factored in you have this malaise, give or take one day up and one day down,” he said. “There’s kind of this feeling that Canada is not doing well.”
The loonie ended the day at 76.55 cents US, down 0.53 of a U.S. cent.
Small said the United States has been gaining ground on Canada as its diversified economy returns to growth and Canada’s resource-heavy markets look for a rebound in oil prices that is unlikely in the short term.
“Any way you measure it we’re definitely lagging behind the U.S. and that’s why our dollar has fallen as low as it has,” he said.
In New York, the Dow Jones industrial average posted a rise of 5.74 points to 17,408.25, the Nasdaq index closed down 10.83 points to 5,033.56 and the S&P 500 fell 2.66 points to 2,083.39.
Earlier this week the Chinese government shocked markets by devaluing its currency, which is pegged to the American dollar.
Small said the devaluation is another blow against the Canadian economy because it makes Canadian raw materials and energy more expensive for Chinese companies.
“Obviously that’s a concern because they’re the largest commodities and energy importer and that’s a huge part of our market,” he said.
On commodity markets, the December gold contract fell $8 to US$1,115.60 an ounce, and the September contract for natural gas ended down 14.4 cents at US$2.787 per thousand cubic feet.
The September crude contract closed down $1.07 to US$42.23 a barrel, its lowest close since March 3, 2009.
The price of oil has slid dramatically over the past 13 months from a high above $110 in July 2014.
In the United States, supply has stayed strong despite the price drop. The OPEC oil cartel hasn’t made moves to cut production and Iran looks to bring its oil back into the world market following a deal on nuclear research that included ending certain sanctions.
“There’s just too much oil in the world and I don’t think that’s going to change anytime soon,” Small said.
Peter Henderson, The Canadian Press
