Canadian Markets Worry Over Quebec

Toronto Fears that Quebec will vote for independence next week rocked Canadian financial markets Monday. One federalist leader said the province would plunge into “a black hole” if it voted to secede.

The Canadian dollar, which traded last week at nearly 75 U.S. cents, took a large one-day tumble to slightly above 73 cents Monday as traders fretted over the possibility of a “Yes” victory in the Oct. 30 referendum.

The Toronto Stock Exchange also quavered. Its composite index lost about 2 percent of its value in trading Monday. Nationwide banks and the Montreal-based conglomerate Imasco Ltd. were especially hard hit.

“Referendum fears dominate the financial markets,” Sherry Cooper, chief economist at investment dealer Nesbitt Burns, told a conference call of clients and staff.

“That’s what you call political instability,” said Prime Minister Jean Chretien, in New York.

Many financial analysts predict major economic upheaval if Quebec votes to secede, including a further plunge for the Canadian dollar and higher interest rates