S&P/TSX Composite drops more than 300 points on banking concerns, mixed US market

Canada’s main stock index fell on Wednesday, dragged down by the energy and financial sectors as growing concern over the global banking sector spread, while US markets were mixed. while the technology sector holds its ground.

S&P/TSX The composite index fell 315.32 points, or 1.6%, at 19,378.84.

In New York, the Dow Jones Industrial Average fell 280.83 points to 31,874.57. The S&P 500 fell 27.36 points to 3,891.93, while the Nasdaq rose 5.90 points to 11,434.05.

Anish Chopra, chief executive officer of Portfolio Management Corp, said the reason the market fell back on Wednesday after Tuesday’s rally was more concern about the financial system.

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S&P/TSX composite up 100 points on Tuesday despite weak energy, US markets rallied

These latest concerns were sparked by the woes of struggling Credit Suisse, whose shares fell on Wednesday after the bank reported that it had identified “significant weaknesses” in its controls. The company’s internal control over financial statements and the bank’s largest shareholder said it would not put any more money in the Swiss lender.

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“Investors are not interested in many of the issues surrounding large financial services firms,” Chopra said.

Angelo Kourkafas, an investment strategist at Edward Jones, said the Credit Suisse news has added to worries about the recent closure of Silicon Valley Bank and Signature Bank in the United States. while now and this is only the most recent development.

Kourkafas said fears of a recession, which have waned in recent weeks amid hopes that a soft landing might be on the horizon, have kept their heads high. He thinks a mild recession is always likely, but agrees it’s even more likely in the current environment.

As financial stocks continue to fall, Nasdaq holds on to growing confidence that the Federal Reserve will pause rate hikes soon, Chopra said.

Meanwhile, new data showed US retail sales fell slightly in February, as did producer prices, Chopra said.

Kourkafas said the Federal Reserve has a lot to think about about its upcoming interest rate decision next week.

The Canadian dollar traded for 72.58 US cents, compared with 73.12 US cents on Tuesday.

The TSX Energy Index fell 5.4% on Wednesday.

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Oil has also been hit by concerns about a global recession, which sent prices down for several days in a row and hit below $70 on Wednesday, Kourkafas said.

“The reopening of China continues to be supportive, but at the moment there are global concerns regarding banks and I think that is weighing on the very sensitive commodities sector,” said Kourkafas. with cycle.

The April crude oil contract fell $3.72 to $67.61 a barrel and the April natural gas contract fell 13 cents to $2.44 per mmBTU.

The April gold contract rose $20.40 to $1,931.30 an ounce and the May contract fell 16 cents to $3.84 a pound.

— With files from the Associated Press

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