Equities in Canada’s largest market opened much lower on Monday, led by declines in the materials and consumer discretionary sectors, as risk sentiment took a hit globally after escalating tensions in the Middle East sent crude prices surging, reigniting inflation worries.
The TSX dumped 555.07 points or 1.7%, to start the day and the week at 32,528.65.
Geopolitical tensions intensified after Iran appointed Mojtaba Khamenei, son of late Ali Khamenei, as the supreme leader. The move was seen as a sign that hardliners remain firmly entrenched in Tehran's leadership as the conflict with the United States and Israel entered its 10th day, reinforcing fears that the war could drag on.
Brokerage J.P.Morgan downgraded First Quantum Minerals to "underweight" from "overweight" and Lundin Mining Corp to "underweight" from "neutral".
Shares in First Quantum edged back $1.85, or 5.6%, to $31.06, while those for Lundin parted with $2.46, or 7.1%, to $32.27.
ON BAYSTREET
The TSX Venture Exchange dropped 18.97 points, or 1.8%, to 1,038.07.
All but one of the 12 TSX subgroups were weaker in the first hour, as gold dimmed 3.7%, materials lost 3.3%, and consumer discretionary
stocks moved back 2.5%.
Only energy bucked the trend, gaining 0.9%.
ON WALLSTREET
Stocks plunged to start the week as U.S. oil topped $100 a barrel, raising concerns about a stagflationary environment for the U.S. economy of rising inflation and slowing growth.
The Dow Jones Industrials took a header, losing 873.89 points, or 1.8%, to 46,627.66. The 30-stock index is coming off its biggest weekly slide in nearly a year.
The S&P 500 index dived 99.24 points, or 1.5%, to 6,640.78.
The NASDAQ capsized 296.75 points, or 1.3%, to 22,090.93.
The $100 oil level was seen by many on Wall Street as a breaking point for the economy unless the war is resolved quickly and prices retreat.
U.S. President Donald Trump posted Sunday evening that a gain in “short term oil prices” was a “very small price to pay” for destroying Iran’s nuclear threat.
The war showed little signs of easing despite Trump’s claim it was “already won” with Iran naming Ayatollah Khamenei’s son, Mojtaba, as its new supreme leader, according to reports.
Prices for the 10-year Treasury sat back, nudging yields up to 4.17% from Friday’s 4.15%. Treasury prices and yields move in opposite directions.
Oil prices skyrocketed $9.43 to $100.33 U.S. a barrel.
Gold prices slumbered $66.20 to $5,092.50 U.S. an ounce.
