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Roundup: Canada's stock market stages dramatic reversal as resources plunge

Xinhua, September 23, 2015 Adjust font size:

Canada's main stock market in Toronto dropped sharply on Tuesday to wipe out a big gain in the previous trading day, as the falling resources shares triggered an across-the-board selloffs.

The Toronto Stock Exchange's benchmark Standard & Poor's/TSX Composite Index tumbled 288.35 points, or 2.09 percent, to 13,491.09 points on the closing bell, as all the eight major sectors lost ground by more than 1 percent.

Resources led the fall over the weaker commodities prices, with metals and mining down 4.91 percent and energy down 1.74 percent, although Bank of Canada Governor Stephen Poloz said on Monday the Canadian economy was able to deal with challenges posed by large movements in resource prices.

The basic metals companies, including copper producers, collapsed as First Quantum Minerals Ltd. vapored 8.1 percent to 5.79 Canadian dollars (about 4.37 U.S. dollars), while Teck Resources Ltd. plummeted 7.65 percent to 7.12 Canadian dollars per share.

Canada's biggest gold producer Barrick shrank 7.22 percent to 8.09 Canadian dollars.

And giants from the oil-patch shed losses with Encana Corp. lower 3.46 percent to 9.20 Canadian dollars.

Meanwhile, the index was also dragged down after the German automaker Volkswagen (VW) admitted to having illegally rigged more than 11 million vehicles to pass anti-pollution test in the United States, and VW possibly face huge fines from the U.S. authorities.

The Ontario-based Magna International Inc., one of the world's biggest automotive suppliers, lost 4.93 percent to 62.34 Canadian dollars in its stock price.

Other losers included the most weighed sector, financials, down 1.73 percent as Canada's second biggest lender Toronto-Dominion Bank shed 2.09 percent to 51.50 Canadian dollars.

On the economic beat, Statistics Canada reported on Tuesday that the national spending on new housing construction was 4.2 billion Canadian dollars in July, up 0.5 percent from the same month a year earlier.

Bank of Canada said in its latest interest rate announcement on Sept. 9 that solid household spending is an important contributor to the Canadian economic growth when resource sector continues to adjust to lower prices for oil and other commodities.

On the currency front, the Canadian dollar Tuesday was down to 0.7543 U.S. dollar, compared with 0.7550 U.S. dollar on Monday. Endit