November contract for benchmark crude oil was down $1.27 at US$44.43/b as commodity prices dip
North American stock markets closed sharply in the red Monday as more evidence of a continuing slowdown in China, the world’s second-largest economy, delivered a blow to commodity prices.
In Toronto, the S&P/TSX index plunged 373.99 points or 2.8 per cent to 13,004.58. The massive decline was led by the health-care sector, which lost more than 10 per cent, and metals and mining, which slipped more than nine per cent.
Oil and metals prices fell after Chinese government statistics showed that profits at the country’s industrial companies plunged 8.8 per cent last month.
The November contract for benchmark crude oil was down $1.27 at US$44.43 a barrel while December copper gave back three cents to US$2.25 a pound.
Even gold, often considered a safe haven for investors, took a beating, with the December contract falling $13.90 to US$1,131.70 an ounce.
“People traditionally buy gold for safety reasons, to diversify away from other assets. That’s not what’s happening right now,” said Luciano Orengo, managing director and portfolio manager at Manulife Asset Management.
“There are fears that the Chinese are selling some gold, to raise some cash to put back into the economy to try to stimulate it.”
An added influx of supply would put downward pressure on the price of the previous metal, Orengo said.
Elsewhere in commodities, the November natural gas gained four cents to US$2.67 per thousand cubic feet.
The loonie was off 0.44 of a U.S. cent at 74.66 cents US. The last time the loonie closed below that level was in June of 2004.
In New York, the Dow Jones industrial average gave back 312.78 points or 1.92 per cent to 16,001.89, while the broader S&P 500 declined 49.57 points or 2.57 per cent to 1,881.77 and Nasdaq plunged a whopping 142.53 points or 3.04 per cent to 4,543.97.