TSX down 10% since September, an official correction

The Toronto Stock Exchange was down by more than 200 points at one point on Tuesday, reducing Canada's benchmark stock index by 10 per cent since its September highs and briefly into official correction territory.

Mining and energy companies take a hit

A trader watches a board showing prices of U.S. stocks. Virtually every sector of the economy has been caught up in the recent sell-off. (Tim Boyle/Bloomberg)

The Toronto Stock Exchange closed down 190.68 points to 14,036.68 on Tuesday, reducing Canada's benchmark stock index by 10 per cent since its September high of 15685.13 and putting it into official correction territory.

A stock market correction is considered to have occurred when equities lose at least 10 per cent of their value. An official bear market requires a pullback of at least 20 per cent.

The TSX still has a gain of three per cent on the year, but all the increase of the past five months has been wiped out.

As has been the case for much of the recent sell-off, mining and energy companies have taken the brunt of the damage.

A series of dour economic signs from all corners of the globe "are all giving equities ample reason for selling off this morning in a round of safe-haven seeking," was how Scotiabank's economics team put it in a note to clients Tuesday morning.

There's enough things to be worried about.- Economist Ian Nakamoto

Shortly after trading began after the Thanksgiving long weekend, the S&P/TSX composite index shed more than 200 points to trade at 13,997, although it later recovered somewhat to trade above the 14,000-point threshold.

The sell-off came on the first trading day after the TSX lost almost four per cent last week.

"I think it's fear," said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier in Toronto. "There's enough things to be worried about."

The loonie lost almost half a cent to trade just above 88.48 at the close.

Base metals — things like copper, nickel and zinc, which are used to make all sorts of consumer goods — are especially vulnerable to a global economy slowdown and fell almost 10 per cent last week alone. 

Securities expert predicts more down days 

The energy sector has fared almost as badly, and got off to a bad start on Tuesday, with the TSX's energy subindex down three per cent as oil lost another $1.40 a barrel, down to just above $84.

But even banks, the traditional stalwart of Canadian stocks, weren't immune. Royal Bank lost almost two per cent to $78.37 and TD held up a little better, losing 1.5 per cent to $52.53.

Canadian stocks were playing catch-up to U.S. ones, which saw heavy losses on Monday while Canadian stock markets were closed for the holiday.

"Just grin and bear it or bear it without the grin, It doesn’t matter!" Mark Grant at Southwest Securities said of the broad sell-off in U.S. stocks, adding that he expects there could be more down days to come.

Gold, which tends to do well when there's fear everywhere else, stayed true to form with gold stocks gaining almost four per cent on the TSX.

With files from The Canadian Press


To encourage thoughtful and respectful conversations, first and last names will appear with each submission to CBC/Radio-Canada's online communities (except in children and youth-oriented communities). Pseudonyms will no longer be permitted.

By submitting a comment, you accept that CBC has the right to reproduce and publish that comment in whole or in part, in any manner CBC chooses. Please note that CBC does not endorse the opinions expressed in comments. Comments on this story are moderated according to our Submission Guidelines. Comments are welcome while open. We reserve the right to close comments at any time.

Become a CBC Member

Join the conversationCreate account

Already have an account?