TSX closes down 360 points as oil trades below $50 a barrel
The Canadian dollar was lower Monday, dragged below the 85 cent US level because of continuing weakness in the price of oil, which dropped below $50 US a barrel for the first time since 2009.
The plunging oil price hammered the Toronto Stock Exchange, which was off by more than three per cent or 380 points in the afternoon. Commodity-based shares were especially hard hit, with the energysubindex off six per cent and metals and mining off more than four.
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The TSX closed down 360.95 points or 2.4 per cent at 14,392.70.
“Investors (are) trying to figure out what the new equilibrium is for oil and commodities in general,” said Craig Fehr, Canadian markets strategist at Edward Jones in St. Louis. “I think we will feel our way through that for quite some time.”
The loonie dropped to its lowest point since May 2009 on Monday, changing hands at 84.90 at one point, although it recovered to close at 85.05 cents US later in the day. Much of that is because of strength in the U.S. dollar — as opposed to weakness in the loonie — because the U.S. greenback has been gaining ground against virtually every other world currency for several weeks now.
