Loading articles...

Markets gripped by coronavirus fears as TSX posts worst week since 2008

Last Updated Feb 28, 2020 at 6:17 pm EDT

Canada’s largest stock index flirted with correction territory Friday after plunging for a sixth-straight day, capping off its worst week since the global financial crisis of 2008.

The S&P/TSX composite index was down as much as 821 points after a technical problem forced an early end to trading on the Toronto Stock Exchange on Thursday.

That marked an 11.5 per cent drop from the record high set Feb. 20.

It partially recovered to move slightly below the 10 per cent correction threshold but was still the worst day in 15 months, losing 454.39 points or 2.7 per cent to close at 16,263.05.

The Dow Jones Industrial Average lost 357 points, or 1.4 per cent while The S&P 500 lost 24 points, or 0.8 per cen. The benchmark index has lost 13 per cent since hitting a record high 10 days ago.

The Nasdaq rose 1 point to 8,567.

The TSX was down 8.9 per cent for the week while Nasdaq was off 10.5 per cent, S&P 500 down 11.5 per cent and the Dow off 12.3 per cent.

The stock swoon is being driven by fear that the coronavirus outbreak will derail the global economy.

Analysts say the attention is now turning to central banks including the Bank of Canada and the U.S. Fed to see if interest rate cuts are on the way to support the global economy.

The market’s losses moderated somewhat after the Federal Reserve released a statement saying it stood ready to help the economy if needed. Investors now widely expect the Fed to cut interest rates by a half-point at its meeting that winds up March 18.

The virus outbreak has been shutting down industrial centres, emptying shops and severely crimping travel all over the world. More companies are warning investors that their finances will take a hit because of disruptions to supply chains and sales. Governments are taking increasingly drastic measures as they scramble to contain the virus.

Airlines and cruise operators have suffered some of the worst hits as flight routes are cancelled, along with travel plans. Big names like Apple and Budweiser brewer AB InBev are part of a growing list of companies expecting financial pain from the virus. Dell and athletic-wear company Columbia Sportswear are the latest companies expecting an impact to their bottom lines.

Cruise operators have also been hard hit, with shares sinking 30 per cent or more as shipboard infections rose. But companies were having a far better day Friday, with some on Wall Street believing that the sell-off was overdone.