AIG losses sink Canadian markets to lowest levelsMarch 3rd, 2009 - 10:00 am ICT by IANS
Toronto, March 3 (IANS) The record-breaking $61.7 billion quarterly loss reported by the failed American International Group (AIG) Monday sent Canadian markets to their lowest level in five years.
The Toronto Stock Exchange (TSX) composite index followed the Dow Jones industrial average (which tumbled below 7,000 for the first time in 11 years) to sink to the levels not seen since 2003.
Massive sell-offs on the bad news from the US plunged the TSX composite index 5.3 per cent to close at 7,687.51. The falling oil prices were even worse news for the stock exchange which has the world’s largest number of oil and gas companies registered on it.
TSX energy shares shank a massive eight per cent as crude prices fell by $4.47 to $40.29.
The energy major EnCana Corp slipped $3.13 to $47.07 and Suncor Inc. $2.71 to $23.75.
Among Canada’s major global players, BlackBerry maker Research In Motion (RIM) was down $2.94 to $47.90, and Bombardier 41 cents to $2.55.
Financial shares were down 4.45 per cent, with Scotiabank retreating $1.68 to $27.03, the Canadian Imperial Bank of Commerce (CIBC) $2.90 to $40.25, the Royal Bank of Canada 95 cents to $29.97, and Manulife Financial $1.32 to $11.58.
Canada’s economic woes were further compounded with the latest figures Monday showing that the country entered recession with its economy shrinking 3.4 per cent in the fourth quarter of the year.
Statistics Canada said this is the biggest economic decline the country has seen since the recession of 1991. The Canadian dollar also slipped 1.16 cents against the US dollar to 77.44 cents US.
With its economy - which till a few months ago was touted as the best performing among G8 countries - in deep recession, the nation’s central bank (Bank of Canada) is likely to announce further cuts in its interest rates.
With 85 percent of its trade linked to the US, Canada has been the worst sufferer of the American economic crisis.