Canada Stocks Fall as Crude Oil Declines, Gold Advances to All-Time Record

Canadian stocks fell a second day, paring a weekly gain in the main stock index, as energy and copper producers fell with commodity prices on concern that Europe’s debt crisis will curb demand for raw materials.

Suncor Energy Inc., Canada’s largest oil and gas company, lost 2.4 percent. First Quantum Minerals Ltd., the country’s second-biggest copper producer, decreased 2.4 percent as the metal slumped the most in a week. Gammon Gold Inc. rose 4.9 percent for the biggest gain in the S&P/TSX after it was upgraded at Mackie Research Capital.

The Standard & Poor’s/TSX Composite Index retreated 101.62 points, or 0.8 percent, to 12,014.97 at 4:10 p.m. in Toronto, paring its weekly gain to 2.8 percent. The S&P/TSX had slipped 0.3 percent from April 1 through yesterday as higher-than- estimated corporate earnings were offset by concern that budget deficits in Europe would slow growth, curbing demand for oil and raw materials.

“It’s a very highly correlated world right now,” said Bob Decker, a money manager at Aurion Capital in Toronto, which manages C$4.2 billion. “When there’s a risk purge because of a macro event like the Greek debt crisis, oil is weak.”

Crude oil fell 3.8 percent to $71.61 a barrel in New York, the lowest settlement price since Feb. 5, on concern that European austerity plans will cut prices of commodities including Canada’s biggest export. Copper slid 3.3 percent to $3.1240 a pound.

Suncor Energy lost 2.4 percent to C$32.06. Bankers Petroleum Ltd., which produces oil in Albania, lost 5 percent to C$8.25 after reporting it broke even in first quarter. Analysts, on average, expected profit of 2 cents a share, according to Bloomberg data.

First Quantum decreased 2.4 percent to C$69.57.

Record Gold Prices

Gold for immediate delivery reached an all-time high of $1,249.70 an ounce in New York on demand for a hedge amid Europe’s debt turmoil, before retreating. Gammon Gold Inc. rose 4.9 percent to C$8.30, the highest since March 29, for the biggest gain in the S&P/TSX after it was raised to “buy” from “hold” at Mackie Research Capital by equity analyst Barry Allan. He expects the shares to reach C$9.45 within twelve months.

Financial shares in the S&P/TSX dropped 1.2 percent on prospects of tighter regulation in the U.S. after the U.S. Senate approved an amendment yesterday that would empower the Federal Reserve to impose limits on debit-card fees collected by the biggest banks as part of the financial-overhaul bill.

‘Knock-off Effect’

“Financials are getting hit by what’s going on in the U.S. with Congress looking at limiting fees,” said Brendan Caldwell, chief executive officer of Caldwell Investment Management Ltd. in Toronto, which manages about C$1 billion. “That’s hammering the sector and we’re getting a bit of the knock-off effect.”

Royal Bank of Canada, the country’s largest lender by assets, fell 0.8 percent to C$59.98 after its U.S. consumer bank had its long-term debt and deposit ratings cut by Moody’s due to losses. Moody’s downgraded the Canadian lender’s RBC Bank (USA) unit by one level to A1 from Aa3, the rating company said today in a statement.

Toronto-Dominion Bank lost 1.5 percent to C$73.39. Bank of Nova Scotia declined 0.4 percent to C$52.33.

TransGlobe Apartment Real Estate Investment Trust fell 3 percent to C$9.70 after its initial public offering of about 24.7 million trust units at C$10 per unit. Gross proceeds of the offering were about C$247.3 million.

Jazz Air Income Fund lost 6 percent to C$4.70. The regional carrier that flies on behalf of Air Canada reported first-quarter profit of 5 cents a share. National Bank of Canada analyst David F. Newman had estimated the company would earn 13 cents a share excluding certain items, while analyst Claude Proulx of Bank of Montreal had forecast adjusted profit of 8 cents a share.

Toromont Industries Ltd. declined 4.9 percent to C$28.20. The compression-equipment supplier reported first-quarter profit from continuing operations excluding all items of 26 cents a share, trailing the average analyst estimate by 2 cents in a Bloomberg survey.

To contact the reporter on this story: Esmé E. Deprez in New York at edeprez@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.