Canadian stock markets, dollar in free fallOctober 23rd, 2008 - 10:21 am ICT by IANS
Toronto, Oct 23 (IANS) Falling oil and commodity prices continued to hammer the Toronto Stock Exchange and the Canadian dollar Wednesday, with both falling steeply since Tuesday.While the Toronto Stock Exchange (TSX) composite index saw a steep fall of 558.92 points as commodity stocks saw a massive sell-off, the Canadian dollar plunged below 80 cents US for the first time since June 2005.
At the close of the day, the composite index stood at 9,236.88, dropping almost six percent since Tuesday.
The Canadian dollar closed the day at 79.7 cents US, losing 2.69 percent of its value since Tuesday.
A year ago, the Canadian currency unit was selling above parity with the greenback. In fact, it had reached a record 110 cents US Nov 7 last year.
The world’s biggest stock exchange in oil, gas, metal and mineral trading - which rose to historic levels just six months ago - is now being bled by precipitous slide in stocks.
Energy stocks fell by more than nine percent while the mining sector saw more than 10 percent of its stock value wiped off Wednesday.
In fact, the mining major Agnico-Eagle lost a quarter of its value Wednesday as its stock fell by 24.7 percent to $31.75.
The fall in the Canadian dollar may boost the sagging manufacturing sector, particularly the auto sector, which has lost thousands of jobs.
But the outlook looks gloomy as recessionary conditions in the US have hit its auto sector with its worst crisis in decades.
Most of the vehicles manufactured in Canadian plants are exported to the US which account for 85 percent of all Canadian exports.
The Canadian limber industry which exports much of its products to feed the US housing industry also faces bleak prospects.
With the crude oil - Canada’s main export - plunging below $70 in the international market, this sector too faces a huge crisis as recovery from the oil sands in Alberta is very costly.
Canada has an estimated 179 billion barrels of oil under it, making it the second largest oil reserve holder in the world after Saudi Arabia. But more than 173 billion barrels of its reserves are buried in the oil sands of Alberta.