Canadian stocks sink over new stimulus budget

Canada's main stock market in Toronto plunged Wednesday as traders were taking in the first budget of the new Liberal government unveiled a day ago in hope of reviving the country's economy.

The Toronto Stock Exchange's benchmark Standard & Poor's/TSX Composite Index lost 114.01 points, or 0.84 percent, to close at 13,379.48 points. Six of the TSX index's eight main sub-sectors were lower.

Oil prices plummeted Wednesday as U.S. crude stockpiles increased. The West Texas Intermediate for May delivery moved down 1.66 U.S. dollars to settle at 39.79 dollars a barrel on the New York Mercantile Exchange, while Brent crude for May delivery decreased 1.32 dollars to close at 40.47 dollars a barrel on the London ICE Futures Exchange.

TSX energy went down 3.08 percent and metals & mining off 10.79 percent as lower commodity prices weighed. First Quantum Minerals Ltd. lost 16.32 percent to 6.92 Canadian dollars (5.24 U.S. dollars ) a share, Twin Butte Energy Ltd. tumbled 22.22 percent to 0.105 Canadian dollar, while Teck Resources shares retreated 13.38 percent to 9.65 Canadian dollars.

The launch customer for Bombardier's new CSeries jetliner, Swiss International Air Lines, said Wednesday it was confident of receiving the jet by June and that it planned to begin services in the third quarter. Bombardier shares went down 5.04 percent to 1.32 Canadian dollars.

Gold stocks suffered losses Wednesday's trading, particularly Barrick Gold, which slumped 7.24 percent to 17.54 Canadian dollars, while Kinross Gold Corporation fell 5.83 percent to 3.88 Canadian dollars.

Canadian Minister of Finance Bill Morneau on Tuesday proposed in the federal budget a spending of 120 billion Canadian dollars (about 91 billion U.S. dollars) in infrastructure over the next decade.

The budget also projected a deficit of 29.4 billion Canadian dollars for fiscal 2016-17. The budget is expected to boost Canada's economic growth by 0.5 percent in the first year and 1 percent in the second year.

Defending his government's choice to run a much-higher-than-promised deficit, Prime Minister Justin Trudeau said Wednesday the bigger deficit is the result of an increasingly slumping economy.

"We promised about 10 billion in new investment and we're bringing forward about 11 billion of new investment," said Trudeau. "It's that the economy has gotten significantly worse."

The Liberals have a mandate from Canadians to invest, rather than cut, Trudeau said. "The promise I made was to invest in the future of this country. That's what Canadians told me we needed and we were going to do it responsibly and that's exactly what we're doing."

The Canadian dollar traded lower at 0.7568 U.S. dollar, compared with Tuesday's closing rate of 0.7672 U.S. dollar. Endit