Canada's main stock index fell to a three-month low on Thursday as an escalation in the Middle East conflict following attacks on energy infrastructure in the region dented risk appetite, with sharp declines in mining shares adding further pressure.
The TSX staggered another 518.53 points, or 1.6%, to break for lunch Thursday at 31,794.14
The dollar inched up 0.02 cents to 72.86 cents U.S.
Silver miners such as Discovery Silver tumbled 58 cents, or 7.4%, to $7.30, and Endeavour Silver withered $1.33, or 10.2%, to $11.68, tracking a hefty decline in prices of the white metal.
ON BAYSTREET
The TSX Venture Exchange plummeted 44.29 points, or 4.5%, to 931.73.
All but one of the 12 TSX subgroups were lower by midday, as gold faded 6.9%, materials tunneled 6%, and consumer discretionaries shed 2%.
Only energy stood out against the negative tide, leaping 3.5%.
ON WALLSTREET
U.S. equities fell on Thursday, while oil prices remained elevated as Wall Street watches for more developments in the Iran war.
The Dow Jones Industrials fainted 378.03 points to 45,847.12.
The S&P 500 index fell 41.88 points to 6,582.82. The much-broader index traded below its 200-day moving average for the first time since May 23.
The NASDAQ dropped 169.65 points to 21,985.43.
The spike in international oil follows Iran striking a key liquefied natural gas (LNG) export facility in Qatar as well as an attack on Iran’s South Pars gas field by Israel. Iran then retaliated by hitting Qatari energy facilities.
With traffic in the key Strait of Hormuz passageway largely at a standstill, the leaders of the United Kingdom, France, Germany, Italy, the Netherlands and Japan expressed in a joint statement Thursday their “readiness to contribute to appropriate efforts to ensure safe passage through the Strait.”
Meanwhile, Micron Technology shares came under pressure, losing 4%. Citi analysts in particular attributed the move to just “some profit taking,” given that a memory supply shortage helped the semiconductor company nearly triple its revenue in its most recent quarter.
The selloff comes after a surprisingly hot producer prices report, and greater inflation expectations from the Federal Reserve, added to fears that the war in Iran could mean the U.S. economy is headed for a stagflation scenario — or a period of lower growth and higher pricing pressures.
Prices for the 10-year Treasury regained strength, lowering yields back to Wednesday’s 4.27%. Treasury prices and yields move in opposite directions.
Oil prices climbed $4.76 to $101.08 U.S. a barrel.
Gold prices collapsed $315.00 to $4,581.200 U.S. an ounce.
