TSX down 2.4 per cent as plunging oil sends markets into tailspin

TORONTO -- The plunging price of oil wreaked havoc on global stock markets Wednesday, with major indexes in North America adding to big losses in Europe and Asia.

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In mid-afternoon trading, the Toronto Stock Exchange's S&P/TSX composite index was down 290.57 points or 2.42 per cent at 11,711.67.

The big drop on the TSX extended an almost unbroken string of losses since the Christmas break that have lowered Canada's main market to levels not seen since August 2012.

Markets in New York were also down sharply, with energy companies leading the decline as the March contract for benchmark crude oil fell $1.19 to US$28.38 a barrel.

The Dow Jones industrial average, off well over 500 points earlier in the day, was down 358.88 points or more than two per cent at 15,657.14. The S&P 500 fell 36.54 points or more than 1.9 per cent to 1,844.79 and the Nasdaq lost 44.44 points or about one per cent.

The commodity-sensitive loonie was poised to make a gain for the first time in more than two weeks, trading up 0.12 of a cent at 68.81 cents U.S. That came as the Bank of Canada decided to hold its trendsetting policy rate at 0.5 per cent.

Analysts had speculated there was a 50-50 chance the central bank might cut in order to stimulate an economic recovery.

Elsewhere in commodities, the March contract for natural gas fell a penny to US$2.10 per mmBtu, while February gold was up $17.10 at US$1,106.20 a troy ounce. Bullion is often seen as a safe haven in times of economic turmoil.

In Europe, Germany's DAX closed down 2.8 per cent while France's CAC-40 and Britain's FTSE 100 were both off 3.5 per cent.

In Asia, Japan's Nikkei index fell 3.7 per cent and is now in bear territory, down 20 per cent from its peak in June. The Hang Seng in Hong Kong lost 3.8 per cent, while China's Shanghai composite shed one per cent of its value.


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