TSX lower as oil retreats from 2016 high above $38 a barrel
After 8 days of gains, TSX falls along with loonie
The Toronto Stock Exchange's eight-day winning streak came to an end on Tuesday as oil lost some of its recent strength.
The S&P/TSX Composite Index was off 73 points at 13,309 at the close of trading. The Dow Jones Industrial Average in New York was even worse, down 109 points to 16,964 while the broader S&P 500 dropped 22 points to 1,979.
"We're overbought," PNC Asset Management Group's Bill Stone said, noting that the S&P 500 is up about 10 per cent from mid-February. "People are taking some profits off of the larger run-up from the low."
A major catalyst for the gloom was weak trade data out of China, that showed exports plunged an alarming 25 per cent in February compared to the same time last year. Global demand weakened, but the numbers were dragged even lower by the Lunar New Year holiday which saw factory shutdowns.
There were also signs of weaker domestic demand, too, as imports fell by 14 per cent.
"Investors are voting with their feet and moving away from riskier assets," Scotiabank said after the Chinese trade data came out.
That was bad news for oil, which had quietly been staging a rally for the last few weeks. Benchmark U.S. crude fell $1.66 cents, or 4.4 per cent, to $36.24 US a barrel on the New York Mercantile Exchange. That came a day after WTI gained almost $2 to its highest level of 2016, at one point touching higher than $38.
Gold was largely flat, changing hands at $1,261 US an ounce. The loonie lost some of its lustre, too, as the Canadian dollar fell three quarters of a cent to 74.53 cents US.
"Oil prices remain the dominant near-term driver of the Canadian dollar," Scotiabank said.