Stocks in this country stayed in the negatives Wednesday, as uncertainty over the future of the banking sector stateside still worked into the minds of investors, spooked by the recent crisis involving Silicon Valley Bank.
The TSX descended 315.32 points, or 1.6%, to close Wednesday at 19,378.84.
The Canadian dollar sank 0.36 cents to 72.68 cents U.S.
Canadian stocks have lost nearly all their yearly gains in the last few days, with the index now at par after the collapse of U.S. lenders SVB and Signature sparked contagion concerns in global financial stocks.
Energy stocks were roughed up the worst, as Africa Oil faltered 26 cents, or 8.7%, to $2.72, while Enerplus lost $1.78, or 9%, to $18.09.
In financials, CI Financial docked 76 cents, or 5.5%, to $13.13, while National Bank capsized $4.17, or 4.2%, to $95.87.
As for materials, First Quantum Minerals tumbled $2.38, or 8.8%, to $24.78, while Ivanhoe Mines slid 93 cents, or 8%, to $10.66.
Gold tried to pull up the rest of the subgroups, as Barrick Gold acquired 70 cents, or 3%, to $24.03, while Sandstorm Gold added 18 cents, or 2.5%, to $7.26.
Industrials scored well, as Canadian Pacific Railway surged $5.82, or 5.8%, to $105.62 after the U.S. transport regulator approved its $31-billion deal to acquire U.S. railroad Kansas City Southern with conditions. Boyd Group Services progressed $1.64 to $215.00.
In utilities, Fortis jumped $1.33, or 2.4%, to $56.59, while Hydro One captured 77 cents, or 2.1%, to $36.97.
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 15.41 points, or 2.4%, to 595.52.
Eight of the 12 TSX subgroups were in the red by session’s end Wednesday, with energy hurtling lower 5.7%, financials poorer 2%, and materials off by 1.8%
The four gainers were led by gold, up 1%, industrials, ahead 0.6%%, and utilities, edging up 0.1%.
ON WALLSTREET
The Dow Jones Industrial Average fell Wednesday as investors contemplated the future of Credit Suisse, a bank with a large international and U.S. presence, and peers.
The 30-stock index was pounded 280.83 points to 31,874.57.
The S&P 500 fell 27.36 points to 3,891.93. Wednesday’s decline brought the S&P 500’s year-to-date gain down to less than a percentage point.
The NASDAQ Composite fought its way into plus territory, 5.9 points, to 11,434.05.
The indexes regained some ground in afternoon trading following announcement from a Swiss regulator that the country’s central bank would give Credit Suisse liquidity if necessary. Investors were concerned earlier in the day after the Saudi National Bank, Credit Suisse’s largest investor, said Wednesday it could not provide any more funding, according to a Reuters report.
The news came 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. U.S.-listed shares of Credit Suisse were last down nearly 14%, off session lows.
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. Attention turned to the big banks on Wednesday.
As Credit Suisse dragged down the European Bank sector, U.S. big bank shares declined in sympathy. Citigroup slid 5%, while Wells Fargo and Goldman Sachs each lost 3%. Bank of America slipped just under 1%.
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 20% in First Republic Bank and 10% in PacWest Bancorp.
Prices for the 10-year Treasury leaped, lowering yields to 3.47% from Tuesday’s 3.68%. Treasury prices and yields move in opposite directions.
Oil prices lost three dollars to $68.33 U.S. a barrel.
Gold prices gained $11.70 to $1,922.60 U.S. an ounce.