Canadian stock prices were pummeled Monday led by energy firms whose shares are under renewed selling pressure as oil prices slip well below $40 a barrel — to levels not seen since the global financial crisis.
Monday’s plunging in oil dragged down the main Toronto stock index by more than 330 points – or more than 2.5 per cent — in mid-afternoon trading as the Canadian dollar fell to levels not seen in more than a decade.
The price of oil also dropped $2.25 to US$37.85 a barrel, falling to levels not seen since the 2008 financial crisis opened up a global recession.
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A major catalyst for oil’s latest descent is commentary from the Organization of Petroleum Exporting Countries (OPEC). The oil producing bloc said Friday it would maintain current production levels for the next six months even as a worldwide supply glut shows no signs of easing.
Oil has dropped from a high above US$110 in July 2014 as OPEC has pumped up supply while demand from big consumers such as China has sagged.
U.S. indexes were less affected, with the S&P 500 off 20 points or 0.96 per cent. The Dow Jones average declined 0.87 per cent or 154 points in afternoon trading.
The Canadian dollar last closed below 74 cents U.S. on June 23, 2004.
The Toronto stock market was on track towards the biggest one-day decline since late September.
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