Toronto stock market stems losses after deep plunge in early trading

The continuing rout on China’s main market prompted a worldwide sell-off Monday that sent North American markets into a tailspin in early trading before recovering somewhat by late afternoon.

TORONTO — The continuing rout on China’s main market prompted a worldwide sell-off Monday that sent North American markets into a tailspin in early trading before recovering somewhat by late afternoon.

The market’s benchmark S&P/TSX index plunged 768 points or 5.7 per cent in early trading, then rallied strongly before selling off again. In late-day trading Canada’s main index was down 310.51 points at 13,163.16.

It was the same story in New York, where the Dow Jones industrial average lost a breathtaking 1,000 points shortly after the open before regaining much or that ground, then faltering again to a still huge loss of 483.88 points at 15,975.87.

The broader S&P 500 index was down 64.19 points at 1,906.70 and the Nasdaq dropped 140.00 points to 4,566.04.

“Obviously there was a rush to get out the door and too many people trying to get out at the same time,” says Conrad Dabiet, a senior portfolio manager at Manulife Asset Management.

Dabiet said Monday’s market action reminded him of the flash crash that occurred on May 6, 2010, where U.S. markets dropped sharply — with computer algorithms and high-frequency trading worsening the losses — before quickly rebounding.

“It certainly felt like that again,” Dabiet said.

The Canadian dollar was among the currencies trading lower as the price of many of its natural resources fell amid concerns about the strength of China’s economy, the world’s second-largest. In afternoon trading the loonie was down 0.24 of a U.S. cent at 75.70 cents U.S., its lowest point since August 2008.

On commodity markets, the October contract for benchmark crude oil was down $1.43 at US$39.01 a barrel, while September natural gas was off a penny at US$2.66 per thousand cubic feet. December gold was down $5.80 at US$1,153.80 an ounce and September copper fell five cents to US$2.26 a pound.

China’s largest stock market, the Shanghai composite index, fell 8.5 per cent to close at 3,209.91 points, its biggest one-day loss since an 8.8 per cent decline on Feb. 27, 2007. That had a major spillover effect in Europe, where Germany’s DAX fell five per cent, the CAC-40 in France slid 5.6 per cent and Britain’s FTSE 100 dropped 4.5 per cent.

Underlying the gloom in China is the growing conviction that policy-makers and regulators may lack the means to stop the losses amid an economic slowdown, a banking system short of cash and investors pulling money out of the country.

“There is a lot of fear in the markets,” said Bernard Aw, market strategist at IG.

The panic has underscored the scale of the challenge for Chinese leaders in seeking to curb excess investment and guide the economy toward a more sustainable pace of growth.

“My biggest concern is that global growth momentum is very fragile,” said Rajiv Biswas, Asia-Pacific chief economist for IHS. “The most important step is to see China take further action to try to bring their economy to a seven per cent growth path.”

Just Posted

PHOTO: Renewable Energy Fair at Red Deer College

The Renewable Energy Fair and Workshops event was held at Red Deer… Continue reading

PHOTOS: Red Deer College Queens host third annual Pink in the Rink game

The RDC Queens picked up an extra special victory on home ice… Continue reading

PHOTOS: The Mustard Seed CEO speaks at Seeds of Hope Gala in Red Deer

The first-ever Seeds of Hope Gala was held at the Red Deer… Continue reading

Person airlifted to hospital after collision near Innisfail

One person was airlifted to hospital after a serious collision west of… Continue reading

WATCH: Make-A-Wish grants Star Wars loving teen’s wish

The Make-A-Wish Foundation granted Anakin Suerink’s wish in Red Deer Saturday afternoon

Migrant caravan swells to 5,000, resumes advance toward US

CIUDAD HIDALGO, Mexico — Despite Mexican efforts to stop them at the… Continue reading

“I don’t feel real”: Mental stress mounting after Michael

PANAMA CITY, Fla. — Amy Cross has a hard time explaining the… Continue reading

Toronto residents set to vote Monday on the next four years of civic leaders

Toronto’s municipal election campaign, marked by unprecedented provincial interference, ends Monday when… Continue reading

Former PQ minister Lise Payette remembered as role model for female politicians

MONTREAL — Members from across Quebec’s political spectrum gathered at a downtown… Continue reading

Voters head to polls for BC municipal elections today, some complain of long lines

VANCOUVER — Voters in British Columbia are heading to the polls today… Continue reading

Kennedy Stewart named mayor of Vancouver; one of several B.C. turnovers

VANCOUVER — Former New Democrat MP Kennedy Stewart has won a neck-and-neck… Continue reading

‘In our bloodline:’ Land-based learning links curriculum with Indigenous culture

REGINA — A school day for six-year-old Hunter Sasakamoose can start with… Continue reading

‘Stupid’ law preventing Canada’s re-engagement with Iran: retired envoy

OTTAWA — The real reason the Liberal government hasn’t been able to… Continue reading

Most Read