Stocks tumble on first trading day of 2016
TORONTO — In what ended as the worst first day of trading in January in eight years on the New York Stock Exchange, investors watched stock prices tumble and braced for more losses. And Canadian investors weren’t immune to the sell-off.
“It’s not a good omen for 2016,” said Doug Porter, chief economist and managing managing director of BMO Financial Group.
In China, stock prices fell seven per cent by 1:30 p.m. local time triggering a “circuit breaker” to kick in on markets in Shenzhen and Shanghai, halting trading and preventing further losses.
In Toronto, investment executive Ian Riach drew a parallel between the frigid temperatures on Bay Street and the sell-off.
“It’s been a rough start to the year,” Riach, senior vice president at Franklin Templeton, said.
“Winter arrived in Toronto and equity markets sold off pretty significantly today.”
Riach said investors have to take a gut-check on whether to stay the course or sell, given the mixed market.
“How much can you tolerate in terms of volatility and how much capital can you be prepared to lose in the short run?” are some questions investors have to answer for themselves, Riach said.
While 2016 began inauspiciously, Porter says BMO is forecasting growth to be about the same as last year.
He says a recovery on Canadian markets depends largely on what happens to the price of oil.
Until then, Porter says the Canadian dollar is likely to fall even lower.
“The Canadian dollar is under pressure until spring, it will fall below 70 cents temporarily and then we do see it making a modest comeback.”
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