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Toronto stocks join global selloff as Credit Suisse sparks concerns

TSX recorded its worst day since December 2022

Canada’s main stock index fell 1.6 per cent on Wednesday, dragged down by energy and financial stocks as Credit Suisse spooked world markets, renewing concerns of a banking crisis.

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By provisional close on Wednesday, the Toronto Stock Exchange’s S&P/TSX composite index was down 315.32 points at 19378.84, its worst day since December 2022.

“We’re back to the volatility of 2022,” Barry Schwartz, portfolio manager at Baskin Financial Services, told Reuters. “2022 was one of the most volatile years we’ve ever seen. It was a little bit calmer this year but here we go again.”

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Canadian financial stocks fell 1.9 per cent on Wednesday, mirroring global financial stocks in falling once again, following a brief relief rally on Tuesday, as Credit Suisse hit a record low after the Swiss lender’s biggest backer said it would not buy any more shares.

Credit Suisse’s sharp decline stoked fears of a banking crisis amid the aftermath of the collapse of U.S. banks Silicon Valley Bank (SVB), which has a branch in Canada, and Signature Bank.

Energy stocks proved the worst-performers on Wednesday, ending the day down 5.4 per cent after oil prices slumped to their lowest in at least five months.

Both crude benchmarks hit their lowest since December 2021 and have fallen for three straight days.

Brent crude fell 4.1 per cent to US$74.26 a barrel. U.S. West Texas Intermediate crude (WTI) was down 4.3 per cent at US$68.27.

Technology stocks dropped 1.3 per cent while the materials group, which includes precious and base metals miners and fertilizer companies, also fell 1.5 per cent on Wednesday.

The Toronto market’s industrials and utilities sectors escaped the losses on Wednesday, up 0.8 per cent and 0.2 per cent respectively.

Canadian Pacific Railway ended the day up 5.7 per cent after the U.S. transport regulator approved its US$31 billion deal to acquire U.S. railroad Kansas City Southern with conditions.

 © Thomson Reuters 2023
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