Stock markets start year on shaky ground after 2018’s big losses

North American stocks were mixed on the first trading day of the new year, dipping in and out of negative territory, after December’s market rout left investors nervous.

Weak manufacturing data from China on Wednesday continued to fuel concerns about slowing demand from the world’s second largest economy, which could lead to slowing global growth.

The Caixin/Markit manufacturing purchasing managers’ index (PMI) for December showed the country’s manufacturing sector shrank for the first time in 19 months.

“We think that growth in the U.S. and Chinese economies will slow in 2019, and by more than investors are discounting, causing equity prices to fall in both cases,” said Oliver Jones, markets economist at Capital Economics, in a report.

In Canada, the S&P/TSX composite index recovered earlier losses to trade up 0.1 per cent to 14,349.41 points in the early afternoon. The benchmark index lost 12 per cent last year, with a swift downturn in the last three months of 2018, following the global trend.

Commodities lead gains

Healthcare stocks led the gains on Wednesday, with shares of marijuana producers Canopy Growth and Cronos Group both up more than four per cent.

The energy sector was also higher as oil prices rallied on news that Saudi Arabia was following through with a pledge to cut exports in order to ease the global supply glut.

The price for the benchmark U.S. oil contract — West Texas Intermediate — was up more than four per cent in New York to $47.25 US.

In other commodities, the price of gold jumped as investors fled to safe havens amid worries about global growth. Gold hit a six-month high, near $1,300 US an ounce after the Chinese manufacturing data came out.

Markets in the U.S. reversed gains in the afternoon to all trade lower. The Dow Jones Industrial Average led the losses, down 0.4 per cent to 23,225.75, while the broader S&P 500 fell 0.3 per cent to 2,497.85 points.

The tech-heavy Nasdaq composite was lower by 0.2 per cent to 6,623.45 points, with big tech stocks continuing to face pressure.

U.S. equities marked their worst performance in a decade last year.

Investors in the U.S. and Canada are also looking ahead to employment data for December on Friday for signs on how the economies ended the year.

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