Stocks across the world fell on Wednesday as China fuelled fears about its economy by allowing the yuan to weaken further and after a nuclear test by North Korea added to a growing list of geopolitical worries.
The S&P/TSX composite index lost 193.14 points, or 1.5%, to close Wednesday at 12,726.80
The Canadian dollar fell 0.43 cents to 71.02 cents U.S.
Investors seeking a haven from turmoil in the market are turning once again to gold as the metal posted its longest winning streak since October, buoyed by the selloff in equities and North Korea’s nuclear test.
With tensions bubbling in the world, gold stocks have gathered strength. Barrick Gold Corp. jumped 49 cents, or 4.6%, to $11.19.
Encana Corp. dropped 43 cents, or 5.8%, to $6.96, and Canadian Natural Resources Ltd. fell $1.34, or 4.4%, to $29.35.
Among financials, Royal Bank of Canada descended $1.25, or 1.7%, to $71.57, and Toronto-Dominion Bank fell $1.33, or 2.5%, to $52.18.
Magna International Inc., the largest North American auto- parts supplier, fell a seventh straight day to match the longest losing streak since April… off $2.01, or 3.7%, to $52.34, and Linamar Corp. tumbled $3.78, or 5.2% to $68.77, a November low.
Automakers sold fewer light vehicles in Canada during December, but reported record-breaking sales of trucks and cars for 2015
Valeant Pharmaceuticals International Inc. rose $2.94, or 2.1%, to $144.10, for a second day of gains. The drug maker named former Chief Financial Officer Howard Schiller to run the company while Chief Executive Officer Michael Pearson remains hospitalized with severe pneumonia. Pearson is on medical leave and the timing of his return remains uncertain, the company said in a statement.
On the economic front, Statistics Canada reported this morning that this country’s imports decreased 0.7% in November and exports increased 0.4%. Import volumes declined 1.6% while prices increased 0.9%. For exports, volumes were up 0.7% while prices declined
0.4%.
As a result, the agency says, Canada's merchandise trade deficit with the world narrowed from $2.5 billion in October to $2 billion in November.
ON BAYSTREET
The TSX Venture Exchange shed 3.89 points to 520.37
All but three of the 13 TSX subgroups were negative on the day, with metals and mining sliding 6.3%, energy down 3.8%, and industrials, off 2.7%.
The three gainers were gold, up 3.4%, while consumer staples climbed 1% and materials inched up 0.2%.
ON WALLSTREET
U.S. stocks closed sharply lower Wednesday, pressured by continued concerns about global economic growth, low oil prices and increased geopolitical tensions.
The Dow Jones industrial average collapsed 252.15 points, or 1.5%, to 16,906.51, with Chevron leading decliners and Wal-Mart the only advancer.
The Dow closed below the psychologically key level of 17,000 for the first time since mid-October.
The S&P 500 slumped 26.33 points, or 1.3%, to 1,990.38, with energy leading nine sectors lower and utilities the only advancer.
The NASDAQ index fell 55.66 points, or 1.1%, to 4,835.77. Apple traded more than 2% lower, near $100 U.S. a share.
Overnight, the Chinese yuan plunged to a five-year low in offshore trading, sharply widening the gap with the mainland-traded yuan.
The headline Caixin China General Services PMI for December was 50.2, down one point from November and the lowest in 17 months, according to Markit. The report comes after another sub-50 print on manufacturing PMI for both China and the United States in the last few days.
Adding to those concerns Wednesday was North Korea's claim to have successfully tested a hydrogen bomb.
Economically speaking, the December ADP report showed creation of 257,000 payrolls.
The U.S. November trade deficit came in at $42.4 billion. Imports of goods fell to their lowest in nearly five years, outpacing a drop in exports
In other economic news, the U.S. Markit Services PMI for December was 54.3, below November's final print of 56.1.
The Institute for Supply Management’s non-manufacturing index came in at 55.3, down from November's 55.9.
The U.S. Commerce Department said on Wednesday new orders for manufactured goods slipped 0.2% after a downwardly revised 1.3% gain in October.
Investors also viewed the Fed December meeting minutes that indicated that for some members, the decision to raise rates for the first time in nearly a decade was a "close call."
Prices for the 10-year Treasury leaped, lowering yields to 2.17% from Tuesday’s 2.25%. Treasury prices and yields move in opposite directions.
Oil prices sank $2.04 a barrel to $33.93 U.S.
Gold prices grew $16.32 to $1,094.00 U.S. an ounce.
