Canada’s main stock index lost more than 300 points as a sharp decline in the technology sector brought it to its three-month low due to continuing fears of a slowdown in global economic growth.
Giles Marshall, portfolio manager at Fiduciary Trust Canada, says the market has been driven over the past three to six months by macro factors such as monetary policy, inflation, geopolitics and weakening Chinese growth, more than corporate profits.
“So you’ve seen this very obvious tug-of-war between bulls and bears with TSX trading in a narrow range … but with a lot of interday and intraday volatility,” he said in an interview.
The combined S & P / TSX index closed for the fifth day in a row, losing 321.08 points or 1.5% to 20,690.81. It has decreased by 6% in the last five days and by 5.5% so far in April.
In New York, the Dow Jones industrial average fell 809.28 points to 33,240.18 points. The S&P 500 fell 120.92 points to 4,175.20 points, while the Nasdaq composite fell 514.11 points, or almost four percent to 12,490.74.
Marshall said there was no clear overall direction for the markets.
“This is an environment where there is no strong consensus, which is why you see such turbulent conditions every day.”
But he said there are noticeable changes below the surface with a clear rotation of unprofitable technologies and companies at the discretion of consumers to energy and security measures such as consumer basic products and utilities.
The energy sector was the only sector in positive territory on Tuesday, gaining nearly one percent in rising crude oil prices, such as Nuvista Energy Ltd. increased by 6.7 percent and Baytex Energy Corp. by 2.7 percent.
The crude oil contract rose $ 3.16 in June to $ 101.70 a barrel, and the natural gas contract rose 17.3 cents in June from $ 6.98 a mmBTU.
Crude oil prices rose after falling below $ 100 a barrel to start the week amid concerns about Chinese demand in the face of the COVID-19 blockade.
“The day was good for the highlighted product, but you see a special force in the names of E&P (research and production), which is typical of the last three to six months,” Marshall said.
The Canadian dollar traded at 78.14 cents in the US, its lowest level in six weeks and compared to 78.38 cents in the US on Monday.
Information technology was the weakest of TSX’s 10 losing sectors. He lost 3.7% as Hut 8 Mining Corp. fell 8.4%, Lightspeed Commerce Inc. with 6.8% and Shopify Inc. 6.0% less.
The tech Nasdaq fell to a 52-week low after moving back into bearish territory after shares of several major technology companies fell. Tesla lost 12.2%, while Apple and Microsoft fell 3.7%.
Microsoft and Alphabet reported gains after markets closed, with investors worried after Netflix recently released very poor results.
“So I think there may be a little more trepidation about the extent to which this type of FANG stock can keep the S&P 500 up. Nasdaq is characterized by a disproportionate number of long-term stocks with no or low returns and they are really struggling and today is another day of weakness in this type of name. “
Consumer discretion and healthcare were close behind technology, with each losing about 2.7 percent.
Materials fell despite higher gold prices as Ivanhoe Mines Ltd fell 7.5 percent.
The June gold contract rose $ 8.10 to $ 1,904.10 an ounce, and the July honey contract fell less than a penny to $ 4.46 a pound.
Bombardier Inc. and Air Canada lost 8.1% and 7.3% respectively due to the downsizing. The country’s largest airline was weaker after failing to meet expectations, with a net loss of nearly $ 1 billion despite more than tripling revenue.
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