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Canada Stocks Plunge Most Since Late March on Second-Wave Fears


By Aoyon Ashraf, Michael Bellusci and Divya Balji

(Bloomberg) Canadian stocks tumbled the most since March 27, slumping with global markets on concerns a second-wave of the coronavirus will stir up new economic challenges.

The S&P/TSX Composite index fell 4.1% in the third day of losses, its longest losing streak since March 9. All sectors declined, with health care and energy especially weak. The market is still up 34% from this year’s low on March 23.

“It’s been a pretty breathless and relentless rally so we wouldn’t be terribly surprised to see a pause or a bit of a pullback,” Brian Madden, portfolio manager at Goodreid Investment said on BNN Bloomberg. “But that’s not to be misunderstood that we’re going back to the depths of the March lows.”

Canadian stocks tumble by biggest drop since March

“If we’ve learned one thing amidst the pandemic, and policy makers’ response, it’s that they’ve adopted the ‘whatever it takes’ mantra and that ranges from unprecedented fiscal stimulus from the federal government,” Madden said.

Crude futures plunged by the most since late April, falling 9.1%.

Meanwhile, Air Canada’s Chief Executive Officer Calin Rovinescu said the Canadian government’s rules on travelers are now “disproportionate” as the Covid-19 pandemic eases in many regions. Shares of the airline fell 8.5% Thursday.

Commodities

  • Western Canada Select crude oil traded at an $8.50 discount to West Texas Intermediate
  • Spot gold fell 0.6% to $1,728.60 an ounce

FX/Bonds

  • The Canadian dollar dropped 1.6% to C$1.3620 per U.S. dollar
  • The 10-year government bond yield fell 4.8 basis points to 0.52%


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