TSX at 5-Month Lows With All Sectors In The Red as Growth Fears Bite
The TSX is down 1.32% to a five-month low, with all sectors in the red, over global growth concerns. The biggest decliners are info tech (-2.86%) and miners (-2.87%). The energy sector is down 2.25%. Silver, copper and crude oil have also lost ground.
The International Monetary Fund on Tuesday cut its world GDP forecasts and slashed expectations for emerging markets for 2019.
Whether global equities rebound in the coming weeks will depend on the outlook for corporate profits and the extent of the rise in long-term interest rates, according to National Bank of Canada. It noted analysts have been revising down earnings for a majority of MSCI AC companies. National said its diffusion index of upward earnings revisions has dropped in recent weeks to a 27-month low of 43%.
National added: 'We continue to see margin expansion as difficult to achieve in this mature phase of the economic cycle under conditions of rising interest rates, higher oil prices , a strong USD, deceleration in emerging markets and very tight labour market conditions that will raiseproduction costs."
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