Canadian markets swooned second consecutive day, with Morningstar Canada index plummeting 3.25% in the morning as Trump’s trade war intensified Thursday’s global selloff.
The S&P/TSX Composite Index started the morning 3.08% lower at 23,504.48 points, resulting from a broad-based selloff, led by energy and mining stocks, as the trade war whipped up selling frenzy and the prospect of a recession among global trading partners.
The Canadian dollar, having enjoyed a relief rally yesterday, fell from C$1.40 back to C$1.42 against the US dollar as the shockwaves of a deepening trade war rippled through global currency markets.
Investors appeared to be spooked by countries against which Trump imposed reciprocal tariffs have started to retaliate, which China leading the way with 34% tariffs on U.S. imports.
Notably, Canada was spared from Wednesday’s steep tariffs, but existing 25% levies on automotive, and 10% on energy, along with a range of other goods that fall outside the purview of the North American trade treaty, the USMCA.
While the global rout brought down the Canadian benchmark, the index has continued to outperform its peers south of the border. Traders attribute this outperformance to low valuations and the sectoral makeup of the benchmark index. The Morningstar Canada index is still up 3.42% in the year to date, is sharp contrast to Morningstar US market index is now down 8.35%, as of April 04.
Trump’s reciprocal tariffs announced Wednesday far exceeded market expectations, triggering a selloff Thursday, which got further fueled on Friday as China hit back with beefy retaliatory tariffs against US exports as other countries weigh similar measures.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.
