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Bloomberg
A sell-off of technology shares in the US is reverberating in Canada, even though the sector makes up only a 10th of the
nation’s stock market.
The small contribution of tech stocks to Canada’s market helped the S&P/TSX Composite Index outperform its US counterpart: Canada was down 1.5%, while the S&P 500 Index plunged 3.5%. But as the rout continued for a second day, the TSX became collateral damage.
The equity market falls for a second session as traders honed in on lofty valuations of tech stocks, brushing past solid jobs data from both the US and Canada. The Canadian benchmark ended the week 2.9% lower, its biggest slump since June 12, while the S&P 500 falls as much as 2.3%.
A drop in the price of oil and gold also weighed on the nation’s stock market, with mining and energy stocks making up about 26% of the index.
With markets closed on Monday for Labour Day, investors have a shortened week packed with central bank rate decisions and economic data releases. Commodities investors will be watching the European Central Bank’s rate decision due September 10 as top central banks debate how best to execute monetary policy. Closer to home, the Bank of Canada will release its policy statement on September 9 and Governor Tiff Macklem will give an economic progress report the next day.