TSX opens with steep losses, moderates as traders catch up; major stocks and gold prices decline
Canadian stocks opened with significant losses and then moderated as traders caught up after the Toronto Stock Exchange and other venues closed for a public holiday during Monday’s global selloff, according to BNN Bloomberg.
The S&P/TSX Composite Index initially fell by as much as 2.6 percent, marking its third consecutive trading day of losses. By 11:16 am in Toronto, the index had reduced its losses to 1.4 percent.
The Canadian equities benchmark is on track for its worst three-day stretch since October 2022, with four stocks declining for every one that gained.
Major stocks like Shopify Inc., Royal Bank of Canada, Brookfield Corp., and Enbridge Inc. saw declines, following steep losses for their US-listed shares on Monday. This mirrored a sharp increase in volatility and a broader global selloff.
Purpose Investments Chief Market Strategist Craig Basinger noted in a Monday client note that his firm had been buying in its multi-asset portfolios while the TSX was closed. He described Monday’s selloff as “mechanical,” leading to a “mispricing of assets” and creating a buying opportunity.
Tuesday’s drop was further intensified by falling gold prices, continuing Monday’s downward trend. Gold miners such as SSR Mining Inc. and Lundin Gold Inc. were among the worst performers on Tuesday.
Despite the recent declines, there may be a positive outlook for TSX-listed stocks. Bloomberg Intelligence equity strategist Gillian Wolff explained that Monday’s selloff seemed part of a shift from tech stocks to lower volatility alternatives.
Historically, the TSX has outperformed US markets during such shifts. Wolff suggested that the Canadian market’s limited exposure to tech and AI might benefit it in the near term as investors adjust to this reversal.
The S&P/TSX Composite Index had recently reached a record high, surpassing 23,000 points for the first time just last week.
