Canada's main stock index fell on Friday, as materials stocks declined and signs of credit stress at U.S. regional lenders sparked concerns.
The TSX dwindled 377.28 points, or 1.2%, to 30,081.52
The Canadian dollar slid 0.07 cents to 71.19 cents U.S.
Still, the TSX appeared positioned to register modest weekly gains, buoyed by its commodity-heavy composition and a record rally in gold prices. The materials sector has led the charge with an 8.6% increase this week.
The TSX has gained 230 points on the week, or 0.77%.
The Canadian dollar nosed ahead 0.07 cents to 71.19 cents U.S.
The decline came after two American lenders disclosed loan fraud on Thursday, driving concerns around credit quality, prompting sharp selloffs on both Wall Street and the TSX.
However, markets found some support after U.S. President Donald Trump on Friday confirmed that his meeting with Chinese President Xi Jinping remained on schedule. Trump also said that proposed 100% tariffs on Chinese imports would not be sustainable.
Prime Minister Mark Carney on Thursday brushed off calls to retaliate against the U.S. over its tariffs on some Canadian exports, saying the two countries were deep in talks over key sectors.
In corporate news, U.S.-listed shares of Bitfarms tumbled 16.3% in premarket trading after pricing $500 million in convertible senior notes due 2031.
Bitfarms shares paled 52 cents, or 7%, to $6.89.
Elsewhere, lithium producer Standard Lithium tumbled $1.25, or 25.5% to $5.69. after announcing the pricing of an upsized $130-million stock offering plan
In the economic docket, Statistics Canada said foreign investors acquired $25.9 billion of Canadian securities in August, led by purchases of debt instruments. Meanwhile, Canadian investors added $19.5 billion of foreign securities to their portfolio, led by investment in shares
ON BAYSTREET
The TSX Venture Exchange collapsed 45.37 points, or 4.5%, to 961.99. The index has gone from hefty winnings to losses on the week of 18.8 points, or 1.92%.
Eight of 12 TSX subgroups were lower by noon EDT, weighed most by gold, down 7.3%, materials, sinking 6.3%, and health-care, off 1.2%.
The four gainers were led by weighed most by telecoms, picking up 0.8%, while consumer staples inched up 0.6%. and industrials gained 0.3%.
ON WALLSTREET
The Dow Jones Industrial Average rose Friday as traders tried to move past credit concerns that sparked a big sell-off in regional banks Thursday.
The 30-stock index had gained 172.32 points midday to 46,124.56.
The S&P 500 stepped forward 9.93 points to 6,639..
The tech-heavy NASDAQ remained negative, however, 10.71 points to 22,551.83.
Stocks remain on track for weekly gains despite Thursday’s decline. The S&P 500 is up 1% after a strong start to the third-quarter earnings. The Dow has added about 1.3% week to date, while the NASDAQ has gained 1.4%.
Stocks that led Thursday’s bank sell off were rebounding, as Wall Street defended the shares and traders bet any bad credit bets were one-offs and not part of a bigger crisis. Zions and Western Alliance disclosed bad loans over the last 48 hours, which sparked a big selloff in the stocks that eventually dragged down the whole market Thursday. Zion lost 13%, while Western Alliance tanked by 11% Thursday.
But Zions Bancorp climbed more than 2% Friday after receiving an upgrade from Baird, which said the drop in market value for the regional bank was out of proportion considering the size of loan losses it was potentially facing. Investment bank Jefferies, caught in the storm for its exposure to bankrupt auto parts retailer First Brands, was last up 3% after Oppenheimer raised its rating to outperform. Jefferies was down 11% Thursday.
Better-than-expected earnings Friday from Fifth Third Bancorp also assuaged worries, sending the stock higher by 2%. The bank’s profit jumped last quarter even after posting a jump in credit losses tied to exposure to bankrupt subprime auto lender Tricolor.
Prices for the 10-year Treasury fell back, raising yields to 4% from Thursday’s 3.97%. Treasury prices and yields move in opposite directions.
Oil prices inched back one cent to $57.45 U.S. a barrel.
Gold prices jumped $54.90 to $4,258.70 U.S. an ounce.
