Plus   Neg

Canadian Shares Plunging Sharply As Virus Fears Escalate

After a weak start and a subsequent rebound that briefly lifted the market into positive territory, Canadian stocks faltered in mid morning trades Monday amid rising worries about the coronavirus spread and its impact on the global economy.

Markets across Asia and Europe tumbled today, weighed down by reports about rising new infections due to the virus outbreak, and disagreement in the U.S. Senate over the rescue package proposed late last week.

However, according to reports, the Federal Reserve has announced extensive new measures to support the economy during the virus pandemic. The Fed said it is committed to using its full range of tools to support households, businesses, and the U.S. economy overall in this challenging time.

The measures announced today include an unlimited expansion of the Fed's asset purchases, with the central bank saying it will purchase Treasuries and mortgage-backed securities "in the amounts needed to support smooth market functioning and effective transmission of monetary policy to broader financial conditions and the economy."

The Canadian benchmark S&P/TSX Composite Index, which ralled to 11.870.56 after an initial sharp decline, has now dropped to 11,510.60, down 341.21 points, or 2.87% from previous close.

On Friday, the index ended with a loss of 318.71 points, or 2.62%, at 11,851.81, after having soared more than 500 points early on in the session.

Real estate stocks are the worst hit in the Canadian market this morning. The Capped Real Estate index has tumbled nearly 8.5%. Shares from utilities, financial, energy, healthcare and consumer staples sections are also sharply lower. Telecommunications shares are down as well.

Materials shares are rising thanks to higher gold prices. Information technology, industrial and consumer discretionary shares are turning in a mixed performance.

Toronto-Dominion Bank (TD.TO), Bank of Nova Scotia (BNS.TO), Canadian Imperial Bank of Commerce (CM.TO) and Royal Bank of Canada (RY.TO) are down 4 to 5.2%.

Energy stocks Enbridge Inc. (ENB.TO), Suncor Energy (SU.TO) and Canadian Natural Resources (CNQ.TO) are declining 3 to 5.4%.

On the economic front, data released by Statistics Canada showed wholesale sales in the country rose for a second consecutive month, increasing by 1.8% to $65.2 billion in January.

Meanwhile, data from Johns Hopkins University shows the number of confirmed coronavirus cases has climbed above 350,000 worldwide, with confirmed cases in the U.S. jumping above 35,000.

For comments and feedback contact: editorial@rttnews.com

Business News

Follow RTT