North American markets tumble for a second day; loonie plumbs decade-old lows

TORONTO – North American stock markets posted triple-digit losses for a second consecutive session Tuesday amid a global sell-off triggered by yet another report signalling a continuing slowdown in China’s economy.

At the close, the S&P/TSX composite index was down 120.36 points at 12,922.47 as the price of oil steadied in a range near seven-year lows. That followed a big drop in crude on Monday that helped send Canada’s main market down more than 300 points or some 2.4 per cent.

Meanwhile, the commodity-sensitive Canadian dollar continued its decline, falling 0.40 of a cent to 73.60 cents U.S., a low last seen in June 2004.

U.S. markets were also deeply in the red amid heavy selling of raw material and energy stocks.

The Dow Jones industrial average lost 162.51 points to 17,568.00 after falling 117 points on Monday, while the broader S&P 500 was 13.48 points lower at 2,063.59 and the Nasdaq edged down 3.57 points to 5,098.24.

On commodity markets, the January contract for benchmark U.S. crude oil ended the session 14 cents lower at US$37.51 a barrel, while January natural gas was unchanged at US$2.07 per mmBtu and February gold was up a dime at US$1.075.30 an ounce.

In economic news, customs data from China showed that exports from the world’s second-largest economy fell 6.8 per cent in November, worse than October’s 3.6 per cent decline, while imports contracted 8.7 per cent.

China accounts for as much as 40 per cent to 50 per cent of global commodity demand, according to consultants PwC.

“For the most part, the global sell-off started with the report from China, which is the fifth consecutive month showing continued weakness in the economy,” said Benjamin Jang, portfolio manager, Nicola Wealth Management in Vancouver.

“There’s additional concern over (China’s) currency reserves, but really, the headline concern is again the exports falling in light of a market where we’re heading into the Christmas season.”

That sparked selling in Asia, where China’s Shanghai Composite lost 1.9 per cent and Japan’s Nikkei 225 finished one per cent lower. In Europe, Germany’s DAX lost two per cent, France’s CAC-40 fell 1.6 per cent and Britain’s FTSE 100 declined 1.4 per cent.

Jang described it as “kind of interesting” that markets have been driven lower by the news from China, describing it as “a phenomenon that maybe reflects the new positioning in terms of investors’ mindset” that perhaps even poor economic data won’t necessarily result in increased government stimulus.

“So going forward … I think that, on a relative basis, with lessening government intervention, the markets are left to kind of support themselves and they are going to trade more in line with fundamentals,” he said.

— With files from The Associated Press