TORONTO — Canada's main stock index fell more than one per cent Wednesday, with broad-based losses led by the energy sector, while U.S. markets also fell by more than one per cent.
The S&P/TSX composite index was down 222.55 points to 19,284.10 on the first trading day in Canada after the Christmas holiday (U.S. markets were open Tuesday).
In New York, the Dow Jones industrial average was down 365.85 points, or 1.10 per cent, to 32,875.71.The S&P 500 index was down 46.03 points, or 1.20 per cent, to 3,783.22, while the Nasdaq composite was down 139.94 points, or 1.35 per cent, to 10,213.29.
Energy stocks were a major factor in the TSX’s bad day, said Michael Currie, senior investment adviser at TD Wealth, with the energy index down 2.39 per cent.
There are some competing news items affecting oil prices, he said — news that China is further reducing COVID rules is good for oil prices, but Russia refusing to sell to countries implementing a price cap on its oil is having a downward effect on prices.
However, oil has been having a good run, so one down day isn’t terrible news, said Currie. And energy stocks this year have far outpaced the price of oil, he noted, with the S&P/TSX capped energy index gaining almost 50 per cent so far this year, essentially carrying the Canadian market in 2022.
The Canadian dollar traded for 73.72 US compared with 73.51 cents US on Friday.
Wednesday was the last day for tax-loss selling, where investors sell off investments that performed poorly during the year to offset capital gains, said Currie. That has likely contributed to the downward day markets are having, he said.
“So anybody who is thinking of selling — today is the day,” said Currie.
Tax-loss selling is likely more aggressive this year, he added, as 2022 was a worse year on the markets than 2021.
In fact, the S&P 500 is on track to have its worst year since 2008.
“It wasn’t a bad year. It was a really bad year,” said Currie.
The Nasdaq is likely seeing a lot of that selling given the year tech stocks have had, he said.
December hasn’t been a good month, when it’s normally one of the best months of the year for markets, said Currie.
“It’s been a bear market for a while now ... we haven’t had any really good stretches this year,” he said.
The February crude contract was down 57 cents at US$78.96 per barreland the February natural gas contract was down 43 cents at US$4.69 per mmBTU.
The February gold contract was down US$7.30 at US$1,815.80 an ounceand the March copper contract was down less than a cent at US$3.84 a pound.
This report by The Canadian Press was first published Dec. 28, 2022.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD=X)
Rosa Saba, The Canadian Press