Greek woes again drag markets down (The Chronicle Herald)

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  1. Drew Wilson

    Drew Wilson AKA IceCube Staff Member Moderator Contributor

    TORONTO — The Toronto stock market tumbled more than three per cent Monday as more worries that Greece won’t be able to avoid a default deepened pessimism about global economic recovery prospects and sparked another selloff of energy and mining stocks.

    The S&P/TSX composite index started the fourth quarter by tumbling 372 points to 11,251.84 with bank stocks also making a big contribution to the slide because of the damage such a default would inflict on Europe’s banks.

    The TSX Venture Exchange dropped 77.77 points to 1,389.4.

    Steep price declines for oil helped push the Canadian dollar down 0.26 of a cent to 95.14 cents US.

    A Greek default would have serious repercussions for the European banking system and likely derail what is already a fragile economic recovery and send it into recession. That would lower demand for oil, copper and other resources Canada produces, weakening exports and squeezing profits in Corporate Canada — eroding a main driver of share prices on the resource-heavy TSX.

    "The commodity market is really tied to the global economic recovery and so when we see a slowdown globally, it obviously impacts Canada," said Sadiq Adatia, chief investment officer at Sun Life Global Investment.

    "We’ll see commodities bounce back at some point in time but just like anything else, when there’s a global slowdown, everything gets impacted and commodities will get its fair share of that."

    U.S. markets were also sharply lower despite a snapshot on the American manufacturing sector which came in better than expected. The Institute for Supply Management’s September index was 51.6, which indicated expansion and was better than the 50.4 reading that economists had expected.

    The Dow Jones industrial average fell 258.08 points at 10,655.3, the Nasdaq composite index lost 79.57 points to 2,335.83 while the S&P 500 index fell 32.19 points to 1,099.23.


    *makes noise of a plane going down*

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