TSX falls as China volatility hits commodities

The Toronto Stock Exchange’s S&P/TSX composite index unofficially ended down 57.66 points, or 0.40 per cent, at 14,193.87.

The miners and energy producers that make up about one- third of Canada’s benchmark stock index led losses as metals prices plunged to levels last seen in 2009 amid signs China’s economy is weakening further.

The energy subsector declined by 1.78 per cent on the day, while the gold subsector was the biggest gainer, adding 3.68 per cent.

Cieszynski said that the day-to-day volatility in the Chinese stock market is only a concern for Canadian investors if it heralds a slowdown in China’s economy and its voracious appetite for resources.

On the commodity markets, the December gold contract rose $5.50 to US$1,118.20 an ounce, while September copper shed three cents to US$2.32 a pound.

“It’s in a very nervous place right now, if it (the price of oil) breaks down a couple more dollars it could be very, very ugly”, said John Kinsey, a portfolio manager at Caldwell Securities.

Iran is predicted to extend its oil exports as soon as Western sanctions are lifted after ratification of a current nuclear deal.

Oil rallied on Tuesday, with U.S. crude settling up almost 2 per cent, after bullish economic data and bets for lower crude stockpiles in the United States, the world’s largest oil consumer.

Orengo said China’s growth could also fall below expectations as the country grapples with stock market volatility.

The Dow Jones industrial average up 3.54 points at 17,548.72, the Nasdaq index fell 9.64 points to 5,082.06, and the S&P 500 declined 1.33 points to 2,101.11 – all up from their early lows.

“It’s not a clear-cut story of this is good and getting better, it’s a lot of stop and go”, he said.