The Toronto stock market finished off one of the most volatile weeks in recent memory on Friday as the slide in oil prices and the Canadian dollar continued.
For the first time in over a decade, the price of oil closed under the $30 U.S. per barrel mark, triggering global losses for investors.
By the end of the trading day, the February contract for benchmark crude oil had fallen $1.78 to US$29.42, a low not seen since 2003.
“Our feeling is that oil will probably be back at and slightly above $40 (U.S.) per barrel by the end of the year, but we have no clue as to exactly where it’s going to bottom,” said Sam Stovall, a stock analyst with Standard and Poor’s.
The drop in oil prices helped knock the Canadian dollar lower. The loonie, which has declined for 10 consecutive trading days against the U.S. dollar, finished the day down 0.81 of a U.S. cent to 68.82 cents U.S., a level not seen since April 2003.
The loonie’s continued plunge is one of the longest losing streaks it has seen since 1970 when Ottawa ended its peg against the greenback and allowed the currency to trade freely.
“For the average Canadian it affects them in two ways, obviously if they go to vacation in the U.S., but also, I think, it’s a sense of national pride,” said Ian Nakamoto, director of research at wealth management firm 3-Macs. “When we see the dollar drop like that I think there’s a sense of, I shouldn’t say loss of national pride, but less confidence in what’s going on in Canada.”
On Bay Street, the S&P/TSX composite index dropped 262.57 points, 2.13 percent, to 13,073.46, its lowest level since June 2013.
South of the border, markets in New York wrapped up an equally unpleasant trading week.
The Dow Jones Industrial average tumbled 390.97 points, 2.39 percent, to 15,988.08, while the Nasdaq dropped 126.58 points, 2.74 percent, to 4,488.42. The S&P500 shed 41.51 points, 2.16 percent, to 1,880.33.
While markets have been on a wild ride this year, Nakamoto said he believes things will improve.
“My belief is that later in the year we will start to move up here,” said Nakamoto. “Right now it’s a bit of capitulation [..] I’m not going to say this is the exact day to get in, but certainly the way the market acts here it’s been very vicious since the start of the year.”