02/09/2015 12:05 AST
Canadian stocks plunged to end lower for second straight session on Tuesday, as the China factor continued to trouble global markets with some disappointing manufacturing data, interlaced with some disappointing economic news from the U.S. and Europe.
The Canadian market ended solidly in negative territory, with markets around the world under pressure after the release of some weak manufacturing data from China, highly suggestive of a slowing economy.
Chinese manufacturers reported the sharpest deterioration in operating conditions in more than six years in August, while the service sector expanded at the slowest pace in the current 13-month sequence of growth.
China's manufacturing Purchasing Managers' Index dropped to 47.3 in August, the lowest reading since March 2009, survey data from Caixin Insight Group and Markit showed Tuesday. The sector has been contracting for six successive months. The reading was above the flash score of 47.1 but was down from 47.8 in July.
Markets in Europe ended firmly to the downside after the disappointing Chinese report. Concerns over the slowdown in the Chinese economy is weighing on shares of mining and luxury goods companies especially. Meanwhile, manufacturing in the Eurozone also showed a slight decrease in August.
Markets in the United States also ended firmly in the negative territory, extending yesterday's weakness. Concerns over China weighed on sentiment in early trade and then U.S. manufacturing data unexpectedly fell to its lowest level since May 2013.
Activity in the U.S. manufacturing sector unexpectedly grew at a slower rate in the month of August, according to a report released by the Institute for Supply Management on Tuesday, with the index of activity in the sector falling to its lowest level in over two years.
The benchmark S&P/TSX Composite Index closed Tuesday at 13,481.90, down 377.22 points or 2.72 percent. The index scaled an intraday high of 13,691.80 and a low of 13,419.12.
On Monday, the index closed down 5.95 points or 0.04 percent, at 13,859.12. The index scaled an intraday high of 13,888.19 and a low of 13,653.87.
The Diversified Metals & Mining Index plummeted 7.23 percent, as First Quantum Minerals (FM.TO) plunged 10.50 percent, Teck Resources Limited (TCK-B.TO) dived 9.31 percent, Lundin Mining Corp. (LUN.TO) ended steeply down 8.50 percent, and HudBay Minerals Inc. (HBM.TO) surrendered 5.01 percent.
Sherritt International (S.TO) plunged 9.92 percent.
The heavyweight Financial Index dived 2.80 percent, as Bank of Montreal (BMO.TO) shed 3.18 percent and National Bank of Canada (NA.TO) surrendered 2.33 percent. Royal Bank of Canada (RY.TO) declined 2.74 percent.
Toronto-Dominion Bank (TD.TO) fell 2.40 percent, Bank of Nova Scotia (BNS.TO) fell 3.29 percent, and Canadian Imperial Bank of Commerce (CM.TO) dropped 2.25 percent.
Crude oil plunged to end sharply lower on demand growth concerns, after some disappointing economic data from China.
The Energy Index plunged 4.38 percent, with U.S. crude oil futures for October delivery, the most actively traded contract, plummeted $3.79 or 7.7 percent, to settle at $45.41 a barrel on the New York Mercantile Exchange Tuesday.
Among the major losers in the energy sector, Crescent Point Energy Corp. (CPG.TO) shed 4.74 percent, Canadian Natural Resources Limited (CNQ.TO) fell 4.35 percent, and Encana Corp. (ECA.TO) plunged 8.34 percent. Suncor Energy Inc. (SU.TO) dropped 3.25 percent, while Cenovus Energy (CVE.TO) dropped 6.66 percent.
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