Canadian stocks had their biggest decline in almost three weeks as raw-material producers dropped after Teck Resources Ltd. missed analysts’ earnings forecasts.
Teck, Canada’s largest base-metals and coal producer, declined 8.3 percent after profit fell 20 percent short of the average estimate. Barrick Gold Corp. lost 1.6 percent as gold fluctuated and other precious metals fell. TMX Group Inc., owner of the Toronto Stock Exchange, surged 6.4 percent after agreeing to be bought by London Stock Exchange Group Plc.
The Standard & Poor’s/TSX Composite Index fell 108.22 points, or 0.8 percent, to close at 13,784.30 in Toronto, the biggest decline since Jan. 20.
Teck’s results “send a shot across the bow that commodities are still a volatile asset class,” said Todd Johnson, a money manager at BCV Asset Management in Winnipeg, Manitoba, which oversees C$255 million ($256 million). “There’s just a lot of hot money that’s moving quickly and will hit the sell button really quick when they don’t see what they like.”
The S&P/TSX rallied 4.8 percent from Jan. 25 to yesterday as economic data and corporate earnings signaled the global economic recovery is becoming more entrenched. Since the current earnings-reporting season began on Jan. 10, 74 percent of S&P 500 companies and 61 percent of S&P/TSX companies that have reported financial results have beaten analysts’ average earnings forecast.
An index of base-metals and coal producers fell from a record level after Teck failed to match analysts’ average earnings forecast, excluding certain items, for the fifth time in six quarters. Copper fell after China, the world’s largest user of industrial metals, raised interest rates.
Teck slumped 8.3 percent in Toronto Stock Exchange trading, the most since June 2009, to C$57.95. First Quantum Minerals Ltd., Canada’s second-largest publicly traded copper producer, declined the most since Aug. 20, decreasing 5.5 percent to C$129.75.
Thirty-one of 34 S&P/TSX gold companies retreated. Gold futures fluctuated on speculation that central banks will raise borrowing costs to cool inflation, eroding demand for the precious metal as an alternative investment.
Barrick lost 1.6 percent to C$47.69. Kinross Gold Corp., Canada’s third-largest gold producer, fell 2.8 percent to C$16.62. Eastern Platinum Ltd., which mines precious metals in South Africa, dropped 6.8 percent to C$1.65.
The S&P/TSX Energy Index declined for a fourth day after the U.S. Energy Department reported higher gasoline and distillate-fuel inventories than most analysts had forecast.
Talisman Energy Inc., which produces oil and gas in North America, the North Sea and Indonesia, lost 2.3 percent to C$22.60. TransCanada Corp., the owner of Canada’s largest pipeline system, decreased 1.1 percent to C$37.79.
Niko Resources Ltd., an oil and gas company with operations in South Asia, slumped 13 percent to C$81.75 after missing analysts’ third-quarter profit estimate by 10 percent, excluding certain items.
TMX soared 6.4 percent to C$42.85 after agreeing to a deal that values it at about C$42.68 a share. If the deal receives approval from shareholders and regulators, TMX shareholders would receive 2.9963 LSE shares for each TMX share they own, giving them 45 percent of the combined company.
Intact Financial, Canada’s largest property and casualty insurer, slumped 4.7 percent to C$48.91 after trailing analysts’ average fourth-quarter profit estimate by 22 percent, excluding certain items.
Sierra Wireless, which makes wireless-communications products, sank 26 percent, the most since December 2008, to C$11.37 after missing analysts’ average fourth-quarter profit estimate by 32 percent, excluding certain items. The company said it may have a loss of as much as 6 cents a share in the first quarter.
Agrium, Canada’s second-largest fertilizer producer, advanced 3 percent to C$95.65, the highest since July 2008, after topping analysts’ average earnings estimate by 20 percent, excluding certain items.
WestJet, Canada’s largest airline by market value, jumped 12 percent to C$14.76 after reporting quarterly earnings of 33 cents a share excluding some items, two times the average analyst forecast. Air Canada, the biggest airline by revenue, rose for a fifth day, advancing 4.3 percent to C$3.42.
Cameco Corp., the world’s second-biggest uranium producer, rose 2.9 percent to C$42.09 after Anthony Young, an analyst at Dahlman Rose & Co., began coverage of the company with a “buy” rating. Demand for uranium will increase due to construction of nuclear power plants in China, Russia and India, Young said in a note to clients.
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