TSX continues to drop sharply as oil prices plummet

The Toronto Stock Exchange (TSX) continued its steady decline Thursday.

When trading began, the S&P/TSX Composite Index was at 14,022.14. By day’s end it had dropped by 299.63 points — over two per cent — and closed at 13,737. Thursday was the fourth consecutive day of losses.

All but one of the 10 main stock groups lost ground Thursday – only Materials came out ahead.

Energy stocks hit their lowest points in 11 years, as oil companies Exxon, Chevron and ConocoPhilips all lost value.

 

The S&P/TSX Composite Index's performance over the past five days. TMX MONEY.

The S&P/TSX Composite Index, the main indicator of market activity at the Toronto exchange, has dropped by over 10 per cent since this time last year.

After some volatility over the winter, the market has been declining consistently since April.

The TSX is not alone in its downturn. In the US, the Dow Jones has dropped for three straight days, while UK and German stock indexes are at their lowest levels in months.

Among the factors causing the market downturns is the global uncertainty following China’s devaluation of its currency. By reducing the value of the Yuan earlier this month, China made its products cheaper, and therefore more appealing as exports. Experts speculate this could lead to a “wave of deflation,” in which emerging markets in Asia devalue their own currencies in order to compete with China.

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