TORONTO — Canada’s main stock index had its worst day in six weeks, one day after U.S. markets plunged due to rising tensions between the United States and China.
The S&P/TSX composite index closed down 122.17 points or 0.75 per cent at 16,149.49 after hitting an intraday low of 15,994.28 points. The market was closed Monday due to the Civic Holiday in many provinces.
The largest single-day decline since late June followed “carnage” suffered south of the border, said Mike Archibald, Associate Portfolio Manager with AGF Investments Inc.
“I would say Canada is actually holding up better than I would have expected today,” he said in an interview.
U.S. markets were down about two per cent over two days after rebounding by about 1.3 per cent Tuesday on the heels of dropping up to 3.5 per cent Monday.
“So all things considered that’s not too bad from yesterday’s action,” Archibald added.
In New York, the Dow Jones industrial gained 311.78 points Tuesday at 26,029.52. The S&P 500 index was up 37.03 points at 2,881.77, while the Nasdaq composite was up 107.23 points at 7,833.26.
Markets sold off after the Chinese devalued its currency Sunday night in response to U.S. threats to impose 10 per cent tariffs Sept. 1 on US$300 billion of imports. That’s in addition to 25 per cent tariffs currently applied to US$250 billion worth of imports.
Devaluing the yuan allows imports from China to remain competitive globally while also hurting U.S. exports.
Markets partially rebounded after the Chinese didn’t devalue its currency during the daily rate setting Monday evening as much as some feared.
The Toronto market didn’t fare as poorly as U.S. markets because of the makeup of the Canadian benchmark, with more exposure to materials that benefited from higher gold prices.
Materials rose 1.3 per cent as the move to safety by investors pushed Yamana Gold Inc. up 9.1 per