The Canadian stock market tanked sharply on Wednesday after taking a breather in the previous session, as the ongoing banking crisis spread to Europe, sparking fears that the turmoil will continue to deepen. As a result, the S&P/TSX Composite Index plunged by 315 points, or 1.6%, to 19,379, erasing all its gains in 2023.
This market selloff came after Saudi National Bank’s chairman told Reuters that it would not buy more shares of the European banking giant Credit Suisse due to regulatory issues. Notably, Saudi National Bank is currently among Credit Suisse’s largest shareholders with slightly less than a 10% stake.
Growing economic concerns led to steep losses in West Texas Intermediate crude oil futures prices for the third consecutive session, extending its week-to-date losses to nearly 11%, resulting in massive declines in Canadian energy stocks. Besides that, a selloff in other key stock market sectors like healthcare, financials, and real estate dragged the main TSX index down.
Top TSX Composite movers and active stocks
Commodity-linked Africa Oil, First Quantum Minerals, Enerplus, Stelco, Capstone Copper, Baytex Energy, and Ivanhoe Mines were the worst-performing TSX stocks for the day, as they plunged by at least 8% each due to diving oil and copper prices.
On the positive side, shares of Canadian Pacific Railway (TSX:CP) defied the broader market gravity by jumping 3.6% yesterday to $106.10 per share. The sharp rally in CP stock came after the Calgary-headquartered transportation and logistics giant told investors that the U.S. Surface Transportation Board has approved Canadian Pacific and Kansas City Southern’s merger application with certain conditions.
The Surface Transportation Board’s decision authorizes the formation of a new combined entity named Canadian Pacific Kansas City, which will become “the first single-line railway connecting the U.S., Mexico, and Canada.” On a year-to-date basis, Canadian Pacific stock now trades with 5.1% gains.
Jamieson Wellness and Barrick Gold were also among the top performers on the Toronto Stock Exchange Wednesday, as they inched up by more than 3% each.
Based on their daily trade volume, Suncor Energy, Athabasca Oil, Canadian Natural Resources, and Manulife Financial were the most active stocks on the exchange.
Commodity prices were largely mixed early Thursday morning, pointing to a flat open for energy and mining stocks on the TSX today. Canadian investors may want to keep an eye on the latest monthly building permits, manufacturing, and weekly jobless claims data from the U.S. market this morning.
Earlier today, Credit Suisse announced that it would borrow up to 50 billion Swiss francs (close to US$53.9 billion) from the Swiss National Bank for additional liquidity to support its core businesses and clients. This news helped Credit Suisse regain investors’ confidence, at least temporarily, to drive a sharp recovery in its share prices in early trading. However, the broader banking sector turmoil may still continue to haunt investors in the near term and keep TSX stocks highly volatile.