Shopify Inc.’s 70% plunge has almost single\u002Dhandedly dragged the Canadian stock market into the red this year, taking the shine off what would otherwise be one…
It’s not the first time a single tech stock has been a huge anchor on the key Canadian index. Nortel Networks Corp.’s collapse was a 353-point drag in 2001, the index’s inaugural year. BlackBerry Ltd., then called Research In Motion, was the TSX’s biggest negative contributor in 2008, pulling the index down more than 300 points.
Soaring oil and metals prices have lifted energy and mining stocks, which make up about a 30% weighting. At the same time, US megacap tech stocks have been pummeled by the relentless rise in interest rates: seven FANG+ stocks are responsible for about half of the S&P 500’s 17.5% decline in 2022. For longer-term holders of index funds, Shopify has had a less meaningful impact. In fact, the stock has had almost no influence on the benchmark over a three-year period, as this year’s losses have essentially given back two years of big gains. The TSX Composite is up 17.7% over three years, with banks, commodities and railways having the biggest upside impact.
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