Canada’s main stock index fell at the open on Wednesday, dragged by energy and financial stocks, as Credit Suisse’s turbulence sparked renewed concerns of a banking crisis.
The TSX cratered 327.98 points, or 1.7%, to open Wednesday at 19,366.18.
The Canadian dollar sank 0.37 cents to 72.68 cents U.S.
On the research front, Scotiabank raised Canadian Pacific Railway’s rating to “sector outperform” from “sector perform”. Shares in CP accelerated $7.67, or 7.7%, to $107.69.
Investors were also on the lookout for fourth-quarter earnings from Jaguar Mining and Nexus Industrial REIT.
Jaguar shares closed Tuesday at $2.59, while units of Nexus chucked 25 cents, or 2.5%, to $9.90.
On the economic calendar, Canada Mortgage and Housing Corporation says the trend in housing starts was 255,735 units in February 2023, down from 259,830 units in January, while the Canadian Real Estate Association revealed national home sales rose 2.3% month-over-month in February. Actual (not seasonally adjusted) monthly activity came in 40% below February 2022.
ON BAYSTREET
The TSX Venture Exchange stumbled 9.62 points, or 1.6%, to 601.41.
All but two of the 12 TSX subgroups were in the red to start Wednesday, with energy moving backward 5.1%, financials poorer 2.3%, and consumer staples weaker 2%.
The two gainers proved to be industrials, up 1%, and gold, better by 0.8%.
ON WALLSTREET
Stocks fell Wednesday as pressure on the financial sector increased with shares of Credit Suisse, a Swiss Bank that has large U.S. and global operations, tumbling nearly 25%.
The Dow Jones Industrials fell hard, 471.45 points, or 1.5%, to 31,683.95, after ending a slump of five straight days Tuesday.
The S&P 500 slipped 49.65 points, or 1.2%, to 3,872.59.
The NASDAQ Composite lost 93.67 points to 11,334.48.
In recent days, a crisis in the financial sector has centered around regional banks as Silicon Valley Bank and Signature Bank collapsed, both casualties of poor management in the face of eight interest rate hikes by the Federal Reserve in the last 12 months. Wednesday morning attention turned to the big banks, with shares of Credit Suisse hitting an all-time low.
Saudi National Bank, Credit Suisse’s largest investor, said Wednesday it could not provide any more funding, according to a Reuters report.
This comes after the Swiss lender said earlier this week it had found “certain material weaknesses in our internal control over financial reporting” for the years 2021 and 2022.
As Credit Suisse dragged down the European Bank sector, U.S. big bank shares declined in sympathy. Citigroup and Wells Fargo shed nearly 5% and 4%, respectively, while Goldman Sachs and Bank of America fell around 4% and 3%, respectively. The Financial Select Sector SPDR Fund (XLF) lost 2.7% trading, giving up its 2% pop on Tuesday.
Regional banks, which rebounded Tuesday to lift sentiment for the broader market, fell back into the red again, pushed down by losses of more than 10% in First Republic Bank and PacWest Bancorp
Prices for the 10-year Treasury leaped, stomping on yields to 3.41% from Tuesday’s 3.68%. Treasury prices and yields move in opposite directions.
Oil prices lost $3.09 to $68.24 U.S. a barrel.
Gold prices gained $18.90 to $1,929.60 U.S. an ounce.