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Stock markets slide into red, loonie loses more than a penny as commodities dip

TORONTO – Negative sentiment was a cloud over North American stock markets Wednesday as the Canadian dollar weakened against the U.S. greenback amid retreating commodity prices.

The S&P/TSX composite index moved sharply lower, shedding 114.01 points to 13,379.48, as the resource-heavy index was pulled down by declining metal and energy stocks.

Also weighing on the index was a 20 per cent drop in shares in Montreal-based online gaming company Amaya (TSX:AYA) following news that its chief executive, David Baazov, has been charged as part of an investigation into insider trading.

Baazov faces five charges, including influencing or attempting to influence the market price of securities of Amaya and communicating privileged information. Baazov denies the allegations and Amaya says it expects him to be exonerated.

Amaya stock fell $3.82 or 20.57 per cent o $14.75 on the Toronto Stock Exchange.

Meanwhile, the commodity-sensitive loonie lost 1.04 U.S. cents to 75.68 cents US, as the American currency strengthened.

On commodities markets, the May contract for benchmark North American crude oil fell $1.66 to US$39.79 a barrel, while April natural gas dipped seven cents to US$1.79 per mmBtu. April gold plunged $24.60 to US$1,224 a troy ounce and May copper slid five cents to US$2.24 a pound.

In New York, the Dow Jones industrial average lost 79.98 points to 17,502.59, while the broader S&P 500 gave back 13.09 points to 2,036.71 and the Nasdaq fell 52.80 points to 4,768.86.

In addition to falling commodity prices, speeches by a number of officials of the Federal Reserve Board have also left some investors rattled over when the U.S. central bank may consider implementing its next rate hike, said Ian Nakamoto, a director of research at 3MACS.

Last week, the Fed decided to leave its key interest rate unchanged amid an uncertain global economy and indicated two rate increases could be expected this year instead of four. Most economists indicated they didn’t expect the Fed to move until at least June.

But that now is up in the air due to some hawkish comments by Fed officials.

“An April rate hike isn’t off the table,” said Nakamoto.

In Europe, stock markets were mixed in the wake of Tuesday’s deadly bombings in Belgium that killed at least 34 people and injured hundreds of others.

Germany’s DAX was flat, while France’s CAC 40 was down 0.18 per cent. Britain’s FTSE 100 lost 0.1 per cent. Belgium’s main index was down 0.3 per cent.

In Asia, Japan’s Nikkei 225 fell 0.28 per cent, while Hong Kong’s Hang Seng fell 0.25 per cent and China’s main Shanghai composite gained 0.35 per cent.

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