By IANS
Toronto : The Toronto stock market (TSX) followed the Asian and European markets Monday, crashing by 605 points and wiping billions off the shelf.
It was the biggest slump by the TSX in seven years. The market had crashed by 6.5 percent in February 2001 when the IT sector had gone bust. Compared to that day’s plunge, the stock market went down by 4.75 percent Monday.
The TSX has been in a slump since October, going down by about 17 percent and wiping off over 300 billion Canadian dollars (US$ 290.1 billion) in the process.
The looming recession in the US and a high dollar are pointers to an impending downturn in the Canadian economy.
Since almost three-fourth of Canada’s trade is with the US, the slump in the US economy has already hit the country, with exports in vehicle parts, lumber and other construction material going down.
As a result, thousands of manufacturing jobs have already been lost in Ontario, which is the economic engine of Canada.
The rising dollar has not helped the manufacturing sector. Tourism from the US also has been hit because of the high Canadian dollar.
It is feared that the slump may have a ripple effect across the economy as companies are holding back because of impending slower growth and money crunch.
This could lead to more and more layoffs, thus impacting the overall economy as people put off buying cars and houses and cutting their daily expenditure on other goods.
The Canadian dollar also fell to its lowest value against the US dollar in four months. It was selling at a little under 97 cents US by the end of Monday.
The Canadian dollar had risen as high US$1.10 in November.