Canada’s largest stock market continued to fall to multi-year lows as crude oil slipped below $29 a barrel on Monday.
The Toronto Stock Exchange’s S&P/TSX composite index was down 132 points at 11,941.54 in mid-afternoon trading. On Friday, the index dropped 262.57 or 2.13 per cent to 12,073.46 — its lowest close since June 2013.
On the commodity markets, U.S. crude prices fell to new 13-year lows, trading at $28.99 per barrel (U.S.) after slipping to as low as $28.36.Click here to view data »
U.S. oil prices briefly dipped below $29 a barrel U.S. on Monday as sanctions were lifted on Iran barring the country from selling its oil internationally, a move exacerbating concerns over a global glut that’s triggered a collapse in prices.
Iran is aiming to increase its oil production by 500,000 barrels per day now that sanctions have been lifted under a landmark nuclear deal with world powers, a top official said.
The Canadian dollar remained near the lowest levels in nearly 13 years but rose slightly to 68.85 cents US, up 0.03 from Friday’s close. Earlier Monday, it traded as low as 68.57 cents US near levels last seen in 2003.
“The Canadian dollar is stable this morning, and likely to trade in low volume as US equity markets are closed for Martin Luther King Day,” Rahim Madhavji, currency strategist at Knightsbridge Foreign Exchange in Toronto, said.
The TSX decline was broad-based, with grocery and food companies showing some of the biggest declines. Shares of George Weston, its subsidiary Loblaw and Metro Inc. were down more than two per cent.
Companies that sell us everything from cellphone services to groceries are feeling the strain of a market downturn that’s reflecting anxieties about the global and Canadian economies.
Consumer discretionary companies have seen the biggest stock market declines, but the pain is spread almost across the board (see chart).Click here to view data »
A major event hanging over the dollar this week is the Bank of Canada rate policy decision scheduled for Wednesday.
Analysts are split on whether the central bank will cut again, but odds have grown that it will as crude prices have continued to fall amid more signs that the country’s economy is weakening. “The Canadian dollar will be in for a busy week,” Madhavji said.