Crude prices suffered their longest losing streak since 1986 following the dismal Chinese data, which also sent copper prices down.
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The S&P/TSX composite index fell 263.33 points to close at 13,473.67. The benchmark Canadian equity gauge has fallen 4.4 per cent this week, the worst drop since December 12.
Canada’s main stock index sank to its lowest in 18 months on Friday, capping a week of rapid retreat on persistently grim global sentiment following more disappointing data out of China.
The Dow Jones industrial average and the S&P were poised for their sharpest weekly fall since November 2011. The Russell 2000 entered correction territory.
Britain’s FTSE 100 was 0.7 per cent lower, Germany’s DAX, which is having its worst month since 2011, was down just under 1 per cent and France’s CAC 40 was off 0.8 per cent.
The selloff came after the Shanghai composite index dropped 3.4 per cent on heavy selling of energy and property companies.
“Yesterday was a decimation in the market”, said Michael James, managing director of equity trading at Wedbush Securities Inc.in Los Angeles.
However, initial claims for unemployment benefits in the U.S. disappointed after a Labor Department report showed an unexpected uptick in claims in the week ended August 15.
The Toronto stock market closed above 11,000 points for the first time since October 1, 2008, as investors started to realize the country was being dragged into a major recession. The data comes on the heels of weaker-than-expected economic data in July, the yuan’s devaluation this month and a stock market plunge.
“China is the main concern”.
“You have to put this week’s move into perspective”. He believes investors should be looking at “buying opportunities up north”. All the remaining sectors fell more than 1 percent, including consumer staples, which slumped 2.7 percent. Put your 10 year hat on.
One of the few bright spots of the day was HP, which rose 4.9 per cent to $28.70, rebounding from a 1-1/2 year low earlier, after brokerages including Citi Research and JP Morgan Securities reiterated their bullish stance on the stock.
On Wall Street, traders were digesting mixed signals from the US Federal Reserve that an interest rate hike in September was still under debate.
The same news driving Canadians’ savings and investments lower is also affecting Canada’s economy, said Avery Shenfeld, chief economist with CIBC World Markets.
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Valeant has been following a strategy of growing through acquisitions in recent years, helping the company almost double its stock price this year.
