Markets slump as Fed smashes sentiment
Investors ran for the hills Friday as they digested the details of the Fed’s announcement a day earlier. While holding the interest rates near zero took the headlines the underlying caution about the global economy was what has spooked the markets.
The Toronto Stock Exchange’s main index fell more than 1 per cent with Wall Street dropping further.
Europe also lost confidence with some markets plunging more than 3 per cent. Asia’s indexes closed higher except Tokyo where the yen gained against the US dollar.
The S&P/TSX Composite Index closed down 140.3 (1.02 per cent)
The Dow Jones closed down 291.2 (1.75 per cent)
Oil is trending lower (Brent $47.69, WTI $44.90 at 4.10pm)
Gold is trending higher (1138.90 at 4.10pm)
The loonie is valued at U$0.7561
Consumer price index up in August
Canada’s consumer price index gained 1.3 per cent in the 12 months to August, the same as it did in July. Statistics Canada revealed Friday that food was up 3.6 per cent; household operations, furnishings and equipment was up 2.5 per cent; and shelter costs rose 1.1 per cent. There was decline in the transportation index, down 2.3 per cent, with gasoline down 12.3 per cent.
Oil prices fall, gold gains
Oil prices declined Friday as demand concerns grow and further hints from OPEC members suggest that there will be no curb on production when they meet in December. West Texas Intermediate was down more than 4 per cent at 4pm. Gold meanwhile is offering investors a safe haven from turbulent equities and is at a near-3 week high.
Government releases plans for One Hydro privatization
The Ontario government has released the preliminary prospectus for the privatization of Hydro One. It’s the first step towards an IPO which will put 60 per cent of the province’s asset up for sale. It’s hoped that it will raise $2.25 billion from the initial offer with a further $6.5 billion when all the shares are sold. More than half of the total will pay down Hydro One debt while the rest is to fund new transit lines.