Canadian markets sink to five-year low

November 21st, 2008 - 11:24 am ICT by IANS  

Toronto, Nov 21 (IANS) The Toronto Stock Exchange (TSX) sank more than nine percent Thursday, partly due to plunging energy and financial sectors.The market slipped below 8,000 for the first time in five years as the TSX composite index dived 765.80 points to close the day at 7,724.80.

From a historic high of 15,073 points in May, North America’s third biggest stock market has sunk by almost half within five months, wiping off hundreds of billion of dollars.

The Canadian dollar - the loonie - also retreated 2.52 cents against the greenback to end the day at 77.31 US cents.

The energy sector went into a free fall as oil prices tumbled below $50 for the first time in two years. By the end of the day, energy stocks were down as much as 14.5 percent.

Among metal stocks, Canada’s mining major Teck Cominco lost 21 percent of its worth on the market. It was also a very bad day for Canada’s financial sector as the banking sector plunged 16 percent.

Amid the market gloom, TD Bank - the country’s second largest bank - announced a $350-million loss on its credit trading activities during the fourth quarter.

However, the bank said it will still achieve its target of $4 billion in earnings from retail banking business for 2008.

TD president and CEO Ed Clark said: “TD’s strategic positioning in wholesale banking has helped us avoid most of the problems that have hurt banks around the world.

“That being said, it’s not been possible to completely avoid the unprecedented global liquidity crisis of the last few months. This has meant that despite holding what we consider quality assets, assets which continue to perform, we’re in a position of having to take some mark-to-market losses.”

TD Bank is the second Canadian bank to report losses from the global slump after Scotiabank last week said the market meltdown will hit it to the tune of $595 million.

Other major banks are also set to announce their write-downs.

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