Business

Stocks, loonie retreat on China economy worries

North American stock markets fell, the price of oil tumbled and the Canadian dollar plunged more than a cent Tuesday on renewed fears of economic weakness in China.
Traders work on the floor of the New York Stock Exchange. Data released overnight renewed concerns about a slowdown in the world's second largest economy. (Brendan McDermid/Reuters)

Stock markets retreated and the Canadian dollar plunged more than a cent Tuesday on renewed fears of economic weakness in China.

The S&P/TSX composite index finished down 157.95 points at 13,708.68, weighed down by stocks in the mining and minerals sector, along with the energy group.

The impetus for the drop came from China, where data released overnight renewed concerns about a slowdown in
the world's second largest economy, a major consumer of raw materials.

The Caixin magazine's purchasing managers' index for the manufacturing sector declined to a reading of 49.4 points from March's reading of 49.7. A number below 50 indicates the Chinese manufacturing sector is contracting. Worries about China were largely responsible for the turmoil in global financial markets in the early part of the year.

Markets were also digesting a surprise interest rate cut by Australia's central bank. The Australian economy has been hit hard by falling commodity prices

The Canadian dollar, which last week nudged up to 80 cents US, was off 1.11 cents at 78.66 cents US. The euro and the British pound also fell against the U.S. dollar

The loonie is closely tied to the moves in the price of oil, which was also down. Benchmark North American crude was lower by $1.13 US per barrel, closing at $43.65US.

U.S. stocks were also under pressure on Tuesday. The Dow Jones industrial average rubbed out Monday's gain of 117 points by plunging  140.25 points to end at 17,750.91.

The broader S&P 500 lost 18.06 points to 2,063.37 and the Nasdaq fell 54.37 points to 4,763.22.

With files from The Associated Press