Stock markets finish rough week with another dive into the red

The Toronto Stock Exchange lost 454 points on Friday after a technical glitch shut down trading early the day before — and investors picked up right where they left off by dumping shares in just about everything.

Canada's largest stock exchange lost about three per cent of its value as the fear over the coronavirus that has settled into financial markets this week continued to batter the share prices of Canadian companies.

Every sector was lower, from banks and energy companies to mining firms, health-care companies and IT. 

Only 17 companies listed on the S&P/TSX Composite Index made gains on Friday, while the other 214 lost ground.

Oil prices slumped again, with a barrel of the North American crude benchmark known as West Texas Intermediate off $1.75 a barrel to barely above $45 US. That's its lowest level in more than a year.

Even the safe haven of gold was lower, losing $65 an ounce to close at $1,579 an ounce.

A glitch on Thursday that shut the TSX down early closed down the market at a time of widespread fear. The TSX said the problem was caused by a "system capacity issue" as it was flooded by buy and sell orders, and said it was "significantly increasing the capacity" of its order entry system to make sure the problem doesn't happen again on another volatile trading day on Friday.

In New York, the rout continued with the Dow off another 356 points or 1.5 per cent, after having earlier been down by almost 1,000 points. U.S. markets rebounded somewhat late in the day after the U.S. central bank put out a statement saying it would "act as appropriate to support the economy."

The mini -rally was enough to barely push the technology focused Nasdaq into a tiny gain of 0.01 per cent just before the close. For the week as a whole, the Nasdaq is still down by almost eight per cent.

"It is a race to the bottom for U.S. indices," Jingyi Pan of IG said in a report. "It may still be too early to call a bottom given the uncertainty around the matter of the coronavirus impact."

Fear spikes to 9-year high

Wall Street's so-called "fear index" — the VIX or Volatility Index, which spikes in times of investor uncertainty — jumped by $1.55 to $40.65. That's its highest level since 2011.

Virus fears "have become full-blown across the globe as cases outside China climb," Chang Wei Liang and Eugene Leow of DBS said.

Overseas markets were even worse, as most major stock markets in Asia and Europe were down by between three and four per cent.

"As if this week hasn't been bad enough for markets, the slide in equities accelerated yesterday as ... markets underwent their worst day this week, as more and more countries reported fresh cases of the coronavirus," said Michael Hewson, chief markets analyst at CMC Markets.

Since the rout began, more than $5 trillion US worth of value has been wiped out from global stock markets. Data compiled by German investment bank Deutsche Bank shows it's also the fastest correction in history, with the S&P 500 losing 12 per cent of its value in just six trading days.