Canadian Stocks Fall as Gold Producers Decline; Banks, Potash Corp. Gain
Canadian stocks fell, led by gold producers, as the precious metal dropped for a second day.
Barrick Gold Corp., the world’s largest producer of the metal, lost 1.1 percent as the U.S. dollar rose for a third day. BCE Inc., the country’s largest phone company, rose 2.4 percent as an index of S&P/TSX telecommunications companies reached a post-2008 high. Royal Bank of Canada, the country’s biggest lender by assets, climbed 0.6 percent as seven of eight publicly traded banks advanced.
The Standard & Poor’s/TSX Composite Index slipped 3.44 points, or less than 0.1 percent, to 11,718.63.
Gold “has had a tough hurdle around $1,230, $1,240 an ounce,” said Robert “Hap” Sneddon, president of money manager Castlemoore Inc. in Oakville, Ontario, and vice president of the Canadian Society of Technical Analysts. “Maybe other participants are not seeing inflation as a near-term problem.”
The S&P/TSX gained 1.7 percent last week after Australia’s BHP Billiton Ltd. offered $130 a share for Potash Corp. of Saskatchewan Inc. S&P/TSX raw-materials companies have surged 11 percent this year, holding the broader index’s decline to 0.2 percent.
An index of S&P/TSX gold producers fell for the first time in six days after surging 10 percent this month through Aug. 20.
Barrick, Goldcorp
Barrick declined 1.1 percent to C$46.38. Goldcorp Inc., Canada’s second-biggest producer of the metal, lost 1.7 percent to C$43.20. Iamgold Corp., which mines in West Africa, South America and Canada, decreased 1.9 percent to C$18.54.
Great Basin Gold Ltd., which explores in South Africa and the U.S., led gains in the S&P/TSX with a 4.7 percent surge to an 18-month high of C$2.22. The company increased its resource estimate for its Burnstone Project in South Africa by 3 percent.
BlackBerry maker Research In Motion Ltd. dropped 1.6 percent to a 17-month low of C$50.21 after Wunderlich Securities Inc. analyst Matthew S. Robison cut his 18-month price estimate on RIM’s U.S.-listed shares to $67 from $85. Robison told clients the company will lose market share to devices using Google Inc.’s Android operating system and that new products from Nokia Oyj also pose a threat.
Dividend-paying stocks gained three days after the Bank of Canada reported a decrease in core consumer prices, raising speculation interest rates will remain steadier than expected.
The S&P/TSX Telecom Services Index rallied the most in five months, led by BCE Inc. and Telus Corp., the country’s second- and third-largest wireless carriers, respectively.
BCE, Telus
BCE, which pays a dividend yield of 5.5 percent, advanced 2.4 percent to C$33.47. Telus, with a yield of 4.6 percent, climbed 2.2 percent to C$43.56.
Canada’s largest pipeline companies, which also pay dividend yields of at least 3.2 percent, also gained. Enbridge Inc. rose 1 percent to C$52.25, while TransCanada Corp. advanced 1 percent to C$37.20.
The S&P/TSX Banks Index increased for a second day, a day before Canadian lenders begin reporting third-quarter earnings. All eight publicly traded banks are scheduled to release financial results by Sept. 2.
Royal Bank climbed 0.6 percent to C$51.69. Bank of Montreal, which is scheduled to report results before the market opens tomorrow, rallied 0.9 percent to C$59.06. Laurentian Bank of Canada, the country’s seventh-largest bank, rose 1.6 percent to C$45.69.
To contact the reporter on this story; Matt Walcoff in Toronto at mwalcoff1@bloomberg.net
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