Canada’s main stock index fell on Friday as China’s slowest growth in nearly three decades exacerbated concerns about global growth.
The Toronto Stock Exchange’s S&P/TSX composite index was unofficially down 49.18 points, or 0.3 per cent, at 16,377.12.
Eight of the index’s 11 major sectors finished lower.
The energy sector erased early gains and fell 1.1 per cent. Tourmaline Oil Corp. lost 5.3 per cent, while Encana Corp. and Vermilion Energy Inc. were down 3.6 per cent and 3.4 per cent, respectively.
Consumer discretionary stocks dropped 2.9 per cent, led by a 25.7-per-cent drop from Gildan Activewear Inc. after pre-releasing weaker-than-anticipated earnings.
Conversely, the materials sector, which includes precious and base metals miners and fertilizer companies, slid 0.2 per cent.
The U.S. dollar headed for its worst week in almost four months on Friday, pummeled by sterling and euro rallies driven by a deal on Britain’s departure from the European Union, while China’s weakest growth in nearly three decades weighed on equities.
The dollar crept lower against the euro as the common currency enjoyed a lift from hopes a Brexit deal could improve the odds of the euro zone avoiding a recession.
Dismal manufacturing data and worries the U.S.-China trade war could slow euro zone economies even further have rattled the euro this year, while fears of a disorderly Brexit slammed sterling.
“We can easily tell what’s driving the euro, and that’s a potential Brexit deal. We’re going to find out this weekend whether this is going to turn into a realty or whether it’s a pipe-dream,” said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.
The euro rose 0.16 per cent to an almost two-month high of $1.114. Sterling edged up 0.05 per cent to a five-month high of $1.2895.
British Prime Minister Boris Johnson confounded his opponents on Thursday by clinching a new deal with the EU, even though the bloc had promised it would never reopen a treaty agreed on last year.
Parliament will vote Saturday on a deal that could lead shares in British-oriented businesses, such as housebuilders and retailers, to rocket to record highs if approved. Investors also predict the pound will rally around 5 per cent.
Michael Hewson, chief market analyst at CMC Markets in London, said however members of parliament cast their vote, the Brexit saga is unlikely to be over.
“If MPs do hold their noses and vote for the deal, at least we can move on to phase 2 which is negotiating the new relationship over the next 14 month transition period,” he said.
Gloomy earnings reports from French carmaker Renault and food group Danone drove European shares lower while negative headlines about Johnson & Johnson and Boeing on Wall Street offset generally positive U.S. corporate earnings.
MSCI’s gauge of stocks across the globe shed 0.14 per cent while the FTSEurofirst 300 index of leading European shares closed down 0.38 per cent.
Bleak Chinese economic data also soured risk appetite, with the Shanghai Shenzhen index falling 1.2 per cent.
Asian stocks stumbled after China’s third-quarter growth slowed more than expected to its weakest pace in almost three decades as the bruising U.S. trade war hit factory output. Gross domestic product (GDP) rose 6.0 per cent year-on-year.
Wall Street also edged lower on worries about the global economy following China’s GDP data, and dragged down by Johnson & Johnson after it moved to recall a batch of baby powder.
Robust earnings from Coca-Cola Co, Schlumberger NV and American Express Co helped mitigate the losses.
The Dow Jones Industrial Average fell 255.07 points, or 0.94 per cent, to 26,770.81, the S&P 500 lost 11.83 points, or 0.39 per cent, to 2,986.12 and the Nasdaq Composite dropped 67.31 points, or 0.83 per cent, to 8,089.54.
Euro zone bond yields rose a day before the Brexit vote. Yields have generally pushed higher since Irish and British leaders said a week ago they saw a path to a deal, boosting risk appetite and eroding demand for safe-haven assets such as bonds.
Germany’s 10-year Bund yield was at -0.39 per cent, after touching its highest since late July on Thursday.
U.S. Treasury yields fell as investors awaited the Brexit vote on Saturday, with the benchmark 10-year U.S. Treasury note up 2/32 in price to push yields down to 1.7484 per cent.
Oil prices edged lower as concerns about China’s economy outweighed bullish signals from its refining sector.
Benchmark Brent crude oil futures settled down 49 cents to $59.42 a barrel. U.S. West Texas Intermediate (WTI) crude futures fell 15 cents to settle at $53.78 a barrel.
Gold steadied, helped by a weaker dollar. U.S. gold futures settled 0.3 per cent lower at $1,494.10 an ounce.