Toronto stock market feels repercussions after early shutdown of Chinese markets

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Photo courtesy: CTV

The Canadian Press

TORONTO: The Toronto Stock Exchange was down sharply Thursday morning amid fresh upheaval around the world following another early shutdown of two major Chinese stock markets.

The S&P/TSX composite index fell 164.21 points at 12,562.59 points shortly after 11 a.m. ET.

The Canadian dollar remained near 12 1/2-year lows at 71.07 cents U.S. but rose 0.05 of a cent from Wednesday’s close.

The world’s financial markets are being tossed by developments in China, where the central bank made a surprise move to adjust its currency rate and two major stock exchanges were closed early Thursday because of a sudden drop in stock prices.

“It is shaping up to be another (wildly) negative day in global equity markets,” said Douglas Porter, chief economist with BMO Financial Group, in a note to clients.

“Panic is at play here, and having the (People’s Bank of China) trying to stem the losses by imposing all sorts of rules and regulations does not help over the longer term.”

In New York, the Dow Jones initially fell by more than 300 points but recovered somewhat to 16,768.48, down 138.03 points. The S&P 500 index lost 18.48 points to 1,971.78 and the Nasdaq declined by 59.29 points at 4,776.47.

On the commodity markets, February contracts for crude oil reduced their earlier losses to five cents, trading at US$33.92 per barrel, and gold futures rose $12.00 to US$1,103.90 an ounce.

Earlier Thursday, trading on China’s Shanghai and Shenzen stock markets were pre-emptively halted for a second time this week after new “circuit breakers” were triggered when a benchmark stock index fell seven per cent.

The circuit breakers also kicked in Monday, the first day of trading since they were introduced on Jan. 1. The China Securities Regulatory Commission said after Thursday’s shutdown that the circuit breaker rule had been suspended.

 

© 2016 The Canadian Press