Equities in Canada’s biggest market endured huge losses early Tuesday morning, after data showed that the country's economy was in recession in the first half of the year and China's manufacturing sector shrank at its fastest pace in three years.
The S&P/TSX composite index opened Tuesday tumbled 273.74 points, or 2%, at 13,585.38.
The Canadian dollar was unchanged in the early going at 76.1 cents U.S.
Valeant Pharmaceuticals International Inc is buying rights to AstraZeneca Plc's late-stage experimental psoriasis drug brodalumab after it was dropped by Amgen Inc in May.
Valeant shares collapsed $5.74, or 1.9%, to $299.25.
Penn West Petroleum Ltd cut its 2015 capital budget for the third time this year, suspended its dividend and said it would lay off about 35% of its workforce as it copes with a slump in crude oil prices.
Penn West shares lopped off eight cents, or 7.8%, to 95 cents.
BMO raised the target price on Element Financial Corp to $24.00 from $23.00.
Element shares gathered three cents to $18.85.
CIBC cut the target price on National Bank of Canada to $47.00 from $48.00. National shares docked 99 cents, or 2.3%, to $42.31.
CIBC cut the target price on Royal Bank of Canada to $83.00 from $84.00.
Shares in Canada’s biggest bank descended $1.97, or 2.7%, to $71.37.
On the economic beat, Statistics Canada reported that, after falling for five consecutive months, real gross domestic product rose 0.5% in June. However, there was a second-quarter decline of 0.1% following a 0.2% decrease in the first quarter, technically putting Canada into a recession.
Moreover, the province of Alberta, which has been hammered by falling crude prices, is forecasting a record budget deficit of $5.9 billion this year, a number that could increase to $6.5 billion, Finance Minister Joe Ceci said on Monday.
ON BAYSTREET
All but one of the 14 TSX subgroups were down looking up in the first hour of trade, as global base metals fell 5.2%, metals and mining lost 4.9%, and energy dropped 3.5%.
Gold was the lone bright spot, moving up 0.5%.
The TSX Venture Exchange faded 6.49 points to begin Tuesday at 552.67.
ON WALLSTREET
U.S. stocks fell about 2% on Tuesday, the first day of trade for September, as weak Chinese data pressured global markets.
The Dow Jones industrial average stumbled 355.57 points, or 2.2%, to 16,172.46, with Exxon Mobil leading all blue chips lower.
The S&P 500 toppled 41.39 points, or 2.1%, to 1,930.79, with energy leading all 10 sectors lower.
The NASDAQ index hurtled lower 81.01 points, or 1.7%, to 4,695.50, wiping out gains for 2015 and struggling to stay out of correction.
In U.S. economic news, the August ISM manufacturing index fell to 51.1 from 52.7 the prior month for its weakest read in over two years, according to Reuters.
Construction spending increased 0.7% in July.
Domestic auto sales are released throughout the day
Two sets of key Chinese data disappointed traders on Tuesday. The official manufacturing purchasing managers' index (PMI) edged down to 49.7 in August from 50 in July, while the final Caixin/Markit manufacturing PMI came in at 47.3 in August, the lowest reading since March 2009.
Even more worrying, China's services sector, which has been one of the lone bright spots in the sputtering economy, also showed signs of cooling, a similar business survey said.
Prices for 10-year U.S. Treasuries gained, lowering yields to 2.18% from Monday’s 2.21%. Treasury prices and yields move in opposite directions.
Oil prices moved lower $1.97 a barrel to $47.23 U.S.
Gold prices gained $10.60 to $1,143.10 U.S. an ounce.
