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TSX Records Biggest Weekly Decline as Energy Falls

Stocks Mixed with US Presidential Outcome still Uncertain

On Friday, the main stock index in Canada ended the worst week it has had in over two years. This was because the energy sector, after recording gains earlier, continued its losing streak seen recently, even though there had been gains recorded by consumer discretionary and some technology stocks.

Volatility in Stock Indexes

The Toronto Stock Exchange Index, which is the biggest one in Canada, recorded a fall of 0.4%, as it was down by 73.58 points and closed the day at 18,930.48. This was the lowest closing value of the index since March 2021.

As far as the weekly decline is concerned, the TSX lost about 6.6%, which is also the biggest decline to have been seen in a week since March 2020. The same volatility was also seen in stocks in the US, as investors were grappling with the possibility of a recession that could be brought on by the recent interest rate hikes by central banks globally.

This included a 75 basis points increase by the US Federal Reserve on Wednesday, which was aimed at staving off inflation. Market analysts said that investors had become quite concerned because of the talk about recession. Plus, oil prices have also pulled back. Energy stocks had been rising so quickly that there was a lot of profit involved in them.

Energy Sector Declines

There was a 5.7% decline in the Toronto market’s energy sector, which was the seventh consecutive day of declines. The oil prices were down to the lowest they have been in the last four weeks. There was a 6.8% drop in US crude oil futures, as investors were worried that the demand for energy could be reduced due to a global slowdown in the economy.

The stock index was also dragged down by the materials group. This comprises of base and precious metal miners as well as fertilizer companies. The decline in gold and copper prices saw this sector lose about 0.9% of its value.

Oil prices had also been lower in the Asian trading hours, as a 0.17% decline was seen in Brent Crude futures that brought them to $119.61 per barrel, while a 0.26% dip was recorded in US crude futures, which brought them to a price of about $117.28 per barrel.

Some Sectors Go Up

As compared to the other sectors, the tech space was able to record gains of 2.2% for the day, as Lightspeed Commerce was moving ahead after its value saw a 7.1% surge. There was also a 1.7% increase in the consumer discretionary stocks and a 1% rise in the industrials too.

In other news, the antitrust regulator in Canada also came to a decision about the proposed merger of Shaw Communications and Roger Communications. The regulatory authority said that the deal should not happen because it can turn out to be a threat to the competition in the country. Despite the regulator’s opinion, the shares of both companies recorded an increase.

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