Canadian stocks get crushed as European markets tumble

Canadian stocks stumbled Friday as a renewed selloff in Europe’s markets caused the S&P/TSX composite index to swing between gain and loss in a session that ended with a loss of 0.49 percent.

The S&P/TSX composite, a benchmark index for Canadian shares, finished at 15,018.19, having closed lower by as much as 0.73 percent. However, the loss included a rebound of 35.04 points, at one point surpassing the previous high of 15,088.23, set on Dec. 19.

The loonie, Canada’s currency, slipped 0.26 percent to 1.3689 per U.S. dollar, recovering slightly from a session low of 1.3690, also the lowest level since Dec. 19.

However, the S&P/TSX composite is trading in territory seen as oversold according to price-volume indicator, and looks vulnerable to additional selling pressure.

To help staunch the selling, the Canadian dollar did post gains to the greenback in a sometimes frenetic trading session as European markets sold off across the board.

The benchmark index opened higher, but turned negative during morning trading after European stock markets entered steep declines.

The selloff in Europe is prompted by the impending introduction of a new Italian government, a new budget approved, and weak economic data from Germany.

On the TSX composite, energy and materials were among the worst-performing sectors, each declining 1.06 percent. Canadian Natural Resources led losses for the TSX, sliding 2.3 percent after Canada’s second-largest oil producer reported a 10 percent slide in crude oil output.

Crude slid 1.6 percent to 72.10 a barrel.

Other sectors that declined included banking, with Royal Bank of Canada falling 0.65 percent and Manulife Financial declining 1.1 percent.

The sector that performed best included technology, as three stocks in the sector gained between 1.12 percent and 1.44 percent.

Among the gainers were Constellation Software, advancing 2.42 percent and Lazard Ltd., up 1.54 percent.

Viacom Inc. gained 1.41 percent after Bloomberg News reported that NBC Universal is nearing a deal to acquire 41 percent of the media company.

Jefferies said it expects a European soft patch to persist for the next two months.

At the time of this writing, London’s FTSE 100 closed down 0.41 percent and the German DAX lost 0.54 percent.

Meanwhile, the Wall Street Journal reports that the U.S. Federal Reserve has decided against raising interest rates again in December.

Currently, the Fed is hiking rates at a gradual pace. The pace of tightening has been slowing with four rate hikes so far this year, compared with three in 2017.

Also contributing to the negative sentiment Friday was the release of data showing that consumer prices increased 0.2 percent in November, slowing from a similar 0.2 percent in October, as lower energy prices offset stronger prices for food.

Excluding volatile food and energy prices, so-called core prices increased 0.1 percent last month, the Labor Department said. Core prices rose 2.1 percent in November from a year earlier, unchanged from the previous month and close to the 2.1 percent average over the past 12 months.

The U.S. central bank has stated it will raise interest rates three times in 2019, raising them four times if inflation falls outside its targets.



U.S. Dollar index pct intraday

NYMEX Crude oil $67.99 – -0.37 pct

Gold $1,252.2 -0.07 -0.03 pct

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