“It’s primarily being driven off of the fact that we had weak Canadian GDP numbers come out and that was followed by the Bank of Canada using statements such as the path of future rates is now more uncertain,” he said in an interview.
The S&P/TSX composite index closed down 35.56 points to 16,056.51, after hitting an intraday low of 15,981.81.
Pashootan said markets are giving back some of the strong gains experienced in the first two months of the year.
He said the initial recovery was driven by the fact that the fall downturn was overdone. But the recent upward movement is the result of central bank comments rather than market fundamentals.
“We’re now seeing a reversion back to the earlier days of the recovery where the market was so dependent on central bank language,” he said.
Thursday’s market decrease was led by cyclical sectors like health care, which fell almost two per cent, consumer discretionary, technology and financials.
Defensive sectors like utilities increased along with energy.
The April crude contract was up 44 cents at US$56.66 per barrel and the April natural gas contract was up 2.5 cents at US$2.87 per mmBTU.
The April gold contract was down US$1.50 at US$1,286.10 an ounce and the May copper contract was down 0.8 of a cent at US$2.91 a pound.
The key financial sector decreased as bank stocks were hit because weaker growth can spill over to consumer confidence, which could prompt weaker spending.
“We do feel that there is an increasing probability that in the second half (of the year) central banks’ around the world language will actually go from the slowing of rates going up to actually discussing the potential of cutting rates.”
In New York, U.S. markets fell for a fourth straight day, losing more than two per cent over that period.
The Dow Jones industrial average was down 200.23 points at 25,473.23. The S&P 500 index was down 22.52 points at 2,748.93, while the Nasdaq composite was down 84.46 points at 7,421.46.
TORONTO — The Canadian dollar dipped for sixth consecutive day and North American markets fell Thursday after global central banks continued convey a dovish tone about raising interest rates.
The loonie traded at an average of 74.42 cents US compared with an average of 74.52 cents US on Wednesday. Since Feb. 27, the currency has lost 1.65 cents or nearly 2.2 per cent.
The downward trajectories for the loonie and markets is meaningful because of the impact on them from central bank commentary, says Kash Pashootan, CEO and chief investment officer at First Avenue Investment Counsel Inc.