Stock markets, loonie down sharply on surprise China currency devaluation
TORONTO - A surprise move by China to devaluate its currency sent North American markets into a tailspin Tuesday, with both Toronto and New York recording triple-digit losses that virtually wiped out the gains of the previous session.
The Canadian dollar, like other commodity-based currencies, was also a casualty of the overnight announcement by China's central bank to devalue the yuan by almost two per cent, with the loonie tumbling 0.75 of a U.S. cent to 76.17 cents.
In Toronto, the S&P/TSX composite index was down 163.22 points at 14,303.17 at mid-afternoon, erasing Monday's 163.69-point gain.
In New York, the Dow Jones industrial average plunged 241.19 points to 17,373.98, reversing Monday's 241.79-point advance, while the Nasdaq dropped 81.73 points to 5,020.07 and the S&P 500 fell 25.22 points to 2,078.96.
The declines came as currency, equity and commodity markets around the world responded to the latest move by Beijing aimed at boosting China's lagging economy and exports.
On commodity markets, the September crude contract lost $2.17 to US$42.79 a barrel, while the September natural gas was down slightly to US$2.84 per thousand cubic feet and September copper fell seven cents to US$2.33 a pound. December gold advanced $4.10 to US$1,108.20 an ounce.
The devaluation's pronounced affect on commodity prices reflected the fact that China, the world's second-largest economy, is a major importer of oil, metals and the like. A lower yuan reduces China's buying power.
Chinese currency devaluation puts North American stock markets in a tumble
TORONTO - A surprise move by China to devaluate its currency sent North American markets into a tailspin Tuesday, with both Toronto and New York recording triple-digit losses that virtually wiped out the gains of the previous session.
The Canadian dollar, like other commodity-based currencies, was also a casualty of the overnight announcement by China's central bank to devalue the yuan by almost two per cent, with the loonie tumbling 0.75 of a U.S. cent to 76.17 cents.
In Toronto, the S&P/TSX composite index was down 163.22 points at 14,303.17 at mid-afternoon, erasing Monday's 163.69-point gain.
In New York, the Dow Jones industrial average plunged 241.19 points to 17,373.98, reversing Monday's 241.79-point advance, while the Nasdaq dropped 81.73 points to 5,020.07 and the S&P 500 fell 25.22 points to 2,078.96.
The declines came as currency, equity and commodity markets around the world responded to the latest move by Beijing aimed at boosting China's lagging economy and exports.
On commodity markets, the September crude contract lost $2.17 to US$42.79 a barrel, while the September natural gas was down slightly to US$2.84 per thousand cubic feet and September copper fell seven cents to US$2.33 a pound. December gold advanced $4.10 to US$1,108.20 an ounce.
The devaluation's pronounced affect on commodity prices reflected the fact that China, the world's second-largest economy, is a major importer of oil, metals and the like. A lower yuan reduces China's buying power.
Chinese currency devaluation puts North American stock markets in a tumble
