Canada's main stock index recorded its biggest drop in more than a year and hit a six-month low on Friday as worries about global economic growth hit shares in every major market sector. With the export-oriented Canadian market and its commodity sectors increasingly focused on the prospects for the global economy, sluggish data from Germany and a bearish forecast from the International Monetary Fund this week have raised red flags.
Shares of energy producers, which have been under pressure for the past three months as oil prices have fallen, were among the biggest heavyweight decliners on the Toronto stock market's benchmark TSX index. The index dropped in four of the five trading sessions this week and has shed about 9 percent since reaching a record high last month. "You could say the markets go up like escalators and go down like elevators," said Matt Skipp, president of SW8 Asset Management. "You could put this down as the inevitable correction." He said the Canadian equity market is overvalued in the context of worries about the global economy.
The Toronto Stock Exchange's S&P/TSX composite index closed down 233.24 points, or 1.61 percent, at 14,227.36. All 10 main sectors on the index were in the red. The index at one point hit 14,188.75, its lowest level since late March. Among energy shares, Suncor Energy Inc gave back 2.3 percent to C$36.66 and Canadian Natural Resources Ltd lost 1.5 percent to C$38.48.
Industrials shed 2.7 percent. Canadian Pacific Railway Ltd fell 4.7 percent to C$212.20, and Canadian National Railway Co was down 3 percent at C$72.25. Shares in several Canadian medical marijuana companies on the small-cap TSX Venture Exchange fell after Reuters reported that the US Drug Enforcement Administration was interested in US investors in Canadian marijuana firms. OrganiGram Holdings Inc dropped 3.5 percent, Bedrocan Cannabis Corp fell 5.6 percent, Tweed Marijuana Inc declined 6.1 percent, and Mettrum Health Corp slipped 10.8 percent.
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