The Toronto Stock Exchange (TSX) plummeted by more than 700 points within minutes of opening Monday, with New York’s Dow Jones losing 1,000 points amid escalating fears about a Chinese economic slowdown.
In a matter of minutes, Standard & Poor’s/TSX Composite Index was down 696.22 points, or approximately 5.17 per cent, following on from a loss of 262 points on Friday.
Plunging to their lowest level since 2013, Canadian stocks are headed for a fourth straight monthly decline, Bloomberg Business reports.
The startling global sell-off that started in China - the “benchmark” Shanghai composite index reportedly erased all of the gains it had made this year on a day dubbed “Black Monday” by Xinhua, China’s official state news agency - has seen nearly $10 trillion wiped from stock markets across the world having peaked on June 3, according to the New York Times.
Bloomberg Business has reported that commodities have been hit hard, with Canadian energy producers, already the worst-performing sector on the TSX this year, declining by 3.6 per cent as Brent crude shrunk to less than $45 a barrel for the first time since 2009.
In a note to Fox Business, IG Market Analyst Alastair McCaig said: “Oil prices have continued falling and even though they’ve been sitting in oversold territory for more than a week, the increasing doubts over China’s abilities to meet its 7 per cent growth target is looking more and more unachievable.”
The loonie also fell to a new decade low. Sitting at its lowest level since August 2004, one Canadian dollar now buys 76 U.S. cents or 48 pence in British pounds sterling.
Pressed on his party’s fiscal record at an event in Drummondville, Quebec, Prime Minister Stephen Harper underlined his message that the economy is the most important issue facing Canadians.
“Given the challenges around us, we need to stick with a long-term plan that has been working and will work,” Harper said Monday.
Targeting his rivals, the Conservative leader continued: “What the other guys are proposing [Liberal leader Justin Trudeau and NDP leader Tom Mulcair], at a time of enormous market instability, is that they would embark on large-scale, permanent spending increases.”
“They would finance that through deficits and through big tax increases, including tax increases on workers and on job-creating businesses.”
As reported by the CBC, Trudeau told reporters: ”We know that it's time that Canadians had confidence in the economy as they look to the future, and not face a government that has no plan and wants you to think that sticking with what we have is well enough, when the real risk is not making change to the failing status quo.”
Mulcair chose instead to target Harper’s faith in Canada’s energy industry, accusing the Prime Minister of leaving the economy vulnerable to such financial crashes.
“Don’t forget that the reason we're in such a precarious situation in Canada right now is because Stephen Harper made a huge bet on one number - oil and gas. And when that number didn't come in, guess what? We were left with a more precarious situation for all Canadians," Mulcair said during a campaign stop in Toronto, according to the CBC.
Eight weeks from polling day, ThreeHundredEight.com’s founder and pollster Éric Grenier latest round of data puts the NDP in front on 33.8 per cent, the Conservatives in second on 29.2 per cent, and Trudeau’s Liberals in third on 27.5 per cent.
Meanwhile, Donald Trump, forever keen to hammer home his warnings of the dangers involving an over-reliance on Chinese economic output, took to social media to vent an ‘I told you so’ rant of his own.
The billionaire real estate mogul and G.O.P. presidential frontrunner seized on the stock-market decline, tweeting:
As I have long stated, we are so tied in with China and Asia that their markets are now taking the U.S. market down. Get smart U.S.A.— Donald J. Trump (@realDonaldTrump) August 24, 2015
Markets are crashing - all caused by poor planning and allowing China and Asia to dictate the agenda. This could get very messy! Vote Trump.— Donald J. Trump (@realDonaldTrump) August 24, 2015
In a short video bearing the title “Depression - be careful of China” posted to his Instagram account, Trump said: “I’ve been telling everybody for a long time: China is taking our jobs, they’re taking our money, be careful, they’ll bring us down. You have to know what you’re doing. We have nobody that has a clue.”
Polling figures illustrate that Trump is pulling away from the pack in the race for the Republican Party’s presidential nomination.
According to a Reuters/Ipsos poll released Friday, nearly 32 per cent of Republicans surveyed said they are backing Trump, up from 24 per cent a week earlier.
Trump’s closest competitor, Jeb Bush, landed on 16 per cent, with retired neurosurgeon Ben Carson coming in third at 8 per cent.
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