The Toronto Stock Exchange (TSX) is sitting at a five-week low as growing fears of a recession lead to a worldwide selloff in equities.
The S&P/TSX composite index, Canada’s main stock exchange, fell 291.02 points, or 1.5%, to close at 19,600.63 on December 15. The index is now at its lowest level since November 9 and down 8% on the year.
All of the Toronto Stock Exchange’s 10 sectors have fallen in recent trading sessions, including a decline of 1.8% for technology stocks. The materials group, which includes metals and fertilizer companies, dropped 3.3% on December 15.
The decline in Canadian stocks comes as neighbouring U.S. equities selloff heavily after the U.S. Federal Reserve raised its benchmark interest rate a further 50 basis points on December 14 and indicated that more rate hikes are coming in 2023.
Hopes that the U.S. central bank would pivot away from interest rate increases led to a rally in stocks during the second half of November. However, investors’ hopes appear to have now been dashed by the U.S. central bank.
The benchmark S&P 500 index in the U.S. is down 19% on the year, while the technology laden Nasdaq index is down 32%. The Dow Jones Industrial Average has declined 9% in 2022.
Stock indexes around the world, from Germany’s Dax (down 13%) to China’s Hang Seng (down 16%) are also in the red for this year
