Ross Marowits, The Canadian Press Published Friday, June 17, 2022 4:31 PM EDT Last Updated on Friday, June 17, 2022 5:43 PM EDT
TORONTO – A sharp drop in crude oil prices spilled a technological rebound to bring down Canada’s main stock market index, ending a brutal week that saw it fall 6.6 per cent in its worst performance in more of two years.
Crude oil prices fell more than six percent Friday to a four-week low due to recession concerns and a strong U.S. dollar.
The August crude contract fell $ 7.26 to $ 107.99 a barrel and the July natural gas contract fell 52 cents to $ 6.94 per mmBTU.
The energy sector fell 5.7 percent, with shares of Vermilion Energy Inc. leading the fall by losing 8.6 percent.
“It’s the only sector that hasn’t been shaved lately, and that’s why people who receive margin calls will often sell their winners because they don’t have enough capital left among the losers,” said Colin Cieszynski, chief. market strategist at SIA Wealth Management.
Meanwhile, technology was one of the industry leaders, gaining 2.2%, as Lightspeed Commerce Inc. increased 7.1% and Shopify Inc. increased by 4.6%.
Bond yields softened, which supported technological gains.
“In a way, we’re having a bit of a setback, so we had the technology – which had been affected very, very hard – recovered and the energy, which had been surpassing, is going through a difficult day. that almost kind of average reversal on both sides, “he said in an interview.
The Canadian dollar was trading at 76.72 US cents compared to 77.35 US cents on Thursday.
Utilities and materials were also lower, as metal prices fell due to the strength of the US dollar.
The August gold contract fell $ 9.30 to $ 1,840.60 an ounce and the July copper contract fell 9.5 cents to $ 4.01 a pound.
“We are only seeing a general turnover of capital in the United States in a flight to quality or a flight to safety and that can even flood the gold. And certainly oil does not help on the side of the dollar. Canadian, “Cieszynski said.
Aurora Cannabis Inc. increased by 6.9% to help boost the health sector by 2.6%.
Discretionary consumers, real estate and telecommunications increased, while industrials increased and Air Canada shares rose 4.7%.
Overall, the S & P / TSX Composite Index closed down 73.58 points to 18,930.48 on a daily turn of more than 400 points.
In New York, the Dow Jones industrial average fell 38.29 points to 29,888.78. The S&P 500 index rose 8.07 points to 3,674.84, while the Nasdaq compound rose 152.25 points to 10,798.35.
U.S. stock markets traded in gains and losses on the day as they ended a week of “roller coasters” that saw large fluctuations and changes in sentiment before and after the U.S. Federal Reserve raised rates. interest in the largest amount since 1994.
Added to the volatility is the so-called quadruple witch hour with the simultaneous expiration once a quarter of stock index futures, stock options and stock index options.
Contributing to the move are investors’ fears that the US economy will fall into recession after being negative in the first quarter and growing closer to zero in the second quarter.
“So it may not be a big drop this quarter, but this could be one of those that just do, just get lost,” Cieszynski said. “We may not end up with something coming out of the cliff, but we may have a few quarters in which we are around zero growth, another rarer definition of recession.”
Market volatility is expected to subside next week because there are no central bank meetings and not much economic news is expected.
“Summer is approaching, so it’s hard to tell if we’re just seeing continued sales or seeing any kind of hook hunting after the falls we’ve had.”
This report from The Canadian Press was first published on June 17, 2022.