The Toronto stock market opened considerably lower after a European decision to include a tax on bank deposits in a bailout of Cyprus sent shockwaves through financial markets the world over.
The S&P TSX index sank 41.08 points to open the week’s first session at 12,788.95
The Canadian dollar picked up 0.19 cents to 97.95 cents U.S.
In companay news, Bombardier Inc will have to pay at least 460 million Swiss francs to Swiss railway group SBB for late delivery of 59 double-deck trains the SBB ordered three years ago. Bombardier shares answered the opening bell lower by six cents to $4.22
Oil and gas whiz BNK Petroleum Inc said on Sunday it had agreed to sell most of its assets in Oklahoma's Tishomingo Field to Exxon Mobil Corp for $147.5 million to fund its exploration program and repay debt. BNK shares vaulted 24 cents, or 42.9%, to 80 cents Monday morning.
But elsewhere in the energy field, shares in Petrobank Energy and Resources swooned 5.3% to 71 cents.
Another suffering sector was in metals and mining, the biggest hit taken by Taseko Mines, off 2.9% to $2.98.
One of the few bright spots showed itself Monday morning in the gold sector, where Golden Star Resources hiked 4.8% to $1.75.
Speaking of things economic, Statistics Canada reported this morning that non-residents acquired $13.3 billion of Canadian securities in January, most of them corporate debt instruments. Meanwhile, Canadian investors reduced their holdings of foreign securities by $1.2 billion, ending a four-month string of increases.
ON BAYSTREET
The TSX Venture Exchange subsided 1.78 points to 1,115.57.
All but two of the 14 Toronto subgroups were lower in the first hour of trading, weighed mostly by energy stocks, off 1%, while metals and mining and their cousins among global base energy each slipped 0.9%.
The two stalwarts were in gold, up 2%, and materials, advancing 0.6%.
ON WALLSTREET
U.S. stocks sold off Monday after a bailout agreement reached over the weekend in Cyprus raised fears about financial contagion in other parts of Europe.
The Dow Jones Industrials fell back 37.57 points to 14,476.50
The S&P 500 index shed 9.78 points to 1,550.92. The tech-heavy NASDAQ Composite moved down 18.32 points to 3,230.75.
After rising for the past 10 trading days, the Dow fell 0.2% Friday, ending its longest winning streak since 1996.
Shares of Wells Fargo, Citigroup, Bank of America and JPMorgan Chase fell.
Chesapeake Energy shares fell 1% after the company was downgraded on valuation concerns. Chesapeake said late Friday that it would continue its attempt to buy back $1.3 billion U.S. of its bonds.
Shares of Carnival Corp. slide 2%, after the cruise line issued a weak sales forecast for the year on Friday. The company has had a string of mechanical issues over the last several weeks.
The European Union unveiled a €10-billion plan early Saturday to rescue Cyprus' outsized banking sector and avoid a default. Though the bailout is relatively small, the EU has required a one-time tax of 6.75% on bank deposits of less than €100,000 and 9.9% for those over that amount.
Cypriots rushed to ATMs as the country tried to win parliament support for the plan. While euro-zone leaders stressed that Cyprus is a unique case, investors worry that depositors in other financially weak European nations might face similar bailout plans in the future.
Early Monday, Cypriot leaders said a vote on the plan has been delayed until Tuesday.
Bank stocks slumped around the globe. National Bank of Greece, Banco Santander and Barclays were all sharply lower.
Prices on the 10-year U.S. Treasury spiked, lowering yields to 1.95% from Friday’s 2%. Treasury prices and yields move in opposite directions.
Oil prices dropped $1.23 to $92.22 U.S. a barrel.
Gold prices gained $16.20 to $1,608.80 U.S. an ounce.
