Canada Stocks Tumble as Banks Slide, Energy Plunges With Crude

  • S&P/TSX sinks 2% after biggest two-day rally since August
  • Stocks worldwide retreat as crude falls after gain last week

Canadian stocks plunged, joining renewed selling in equities from Europe to America as crude oil resumed a selloff that sent energy shares tumbling.

The Standard & Poor’s/TSX Index slid 2 percent to 12,143.16 at 4 p.m. in Toronto, the first decline in three sessions. Eight of the index’s 10 main industries fell, with energy and financial companies leading the index lower. The S&P/TSX, which entered a bear market earlier this year, added 2.6 percent last week, its first weekly advance of 2016.

U.S. and European stocks also halted a two-day rally, as crude oil tumbled 5.8 percent in New York. The rout in oil rekindled concerns that global growth is slowing and sparked demand for haven assets such as government bonds. The yield on Canada’s benchmark 10-year bond slid seven basis points to 1.24 percent.

Declines in energy prices, as well as a slumping economy, have driven consumer confidence in Canada to a record low. Data today showed the Bloomberg Nanos Canadian Confidence Index measuring optimism on personal finance, job security, housing and the economy fell to 52.3 from 53 a week earlier.

All companies in the 55-member S&P/TSX energy index declined. Penn West Petroleum Ltd declined 7 percent, while Gran Tierra Energy Inc and Whitecap Resources Inc lost at least 5.9 percent.

Financial stocks in the S&P/TSX index lost 1.7 percent, as the drop in yields threatened the earnings power at lenders and damped the prospects for investment returns at financial-services firms. The S&P/TSX Banks Index plunged 3 percent Toronto-Dominion Bank and Royal Bank of Canada sliding more than 2.9 percent.

Raw-materials producers fell 0.6 percent as a Bloomberg index of commodities lost 1.1 percent.

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