Canadian stocks fell, led by energy companies and banks, as Europe’s finance leaders prepared to weigh the risk of a Greek debt default.
Suncor Energy Inc. (SU), Canada’s biggest oil and gas producer, lost 5.5 percent after crude oil fell to the lowest level in more than a year. Teck Resources Ltd. (TCK/B), Canada’s biggest base- metals and coal producer, sank 7.2 percent as copper fell below $3 per pound to a 14-month low. Canadian National Railway Co., the country’s largest railroad, decreased 2.4 percent as transport companies slipped.
The Standard & Poor’s/TSX Composite Index lost 372 points, or 3.2 percent, to 11,251.84, the lowest since July 6, 2010, as all 10 industries in the index fell.
“The macro view is still driving everything right now with fear of a global slowdown and a debt crisis in Europe,” Jennifer Radman, a money manager at Caldwell Investment Management Ltd. in Toronto, said in a telephone interview. The firm oversees about C$1 billion ($953 million). “Commodity prices are a big exposure to a slowdown in global growth.”
The S&P/TSX slid 13 percent in the third quarter, the most since the last three months of 2008, as commodities had the steepest quarterly drop since the financial crisis. The S&P GSCI index of 24 raw materials fell 11 percent last quarter on concerns that the world will slide into another recession. The stock benchmark gauge gained 1.4 percent last week in its first advance in a month.
The Greek government approved 6.6 billion euros ($8.8 billion) of austerity measures yesterday to narrow the 2012 deficit to 6.8 percent of gross domestic product, missing the 6.5 percent goal previously set with the EU, International Monetary Fund and European Central Bank. European Union Economic and Monetary Affairs Commissioner Olli Rehn praised the budget cuts while saying it’s too early to know whether they are sufficient to secure the next aid tranche for Greece.
The S&P/TSX Energy Index fell 4.8 percent after falling 19 percent last quarter. Suncor Energy lost 5.5 percent to C$25.28. Canadian Natural Resources Ltd. (CNQ), the country’s second-biggest energy company by market value, fell 5.6 percent to C$29.05. Cenovus Energy Inc. (CVE), the country’s fifth-largest energy company, decreased 4.2 percent to C$30.93.
The S&P/TSX Financial Index dropped 3 percent as banks and insurance companies declined. Banks lost after a report yesterday from Cheryl Pate and Timothy Skiendzielewski at Morgan Stanley said investment banking profits for Canadian lenders will fall 46 percent in the fourth quarter from the third as capital market revenue remains weak into 2012.
Toronto-Dominion Bank (TD), the country’s second-largest lender by assets, fell 3 percent to C$71.67. Royal Bank of Canada, the country’s largest lender, lost 2.7 percent to C$46.78. Bank of Nova Scotia (BNS), Canada’s third-biggest lender, slipped 3 percent to C$51.12.
Insurance companies fell after a report from Andre-Philippe Hardy, an analyst with the Royal Bank of Canada (RY), said life insurance companies are likely to record weaker-than-normal results for the third quarter because “equity markets and interest rates declined sharply.”
Manulife Financial Corp. (MFC), North America’s fourth-biggest insurer, slipped 4.8 percent to C$11.37. Sun Life Financial Inc. (SLF), the country’s third-biggest insurer, lost 4.2 percent to C$23.97.
Canadian base-metal companies dropped after copper extended the biggest quarterly retreat since 2008 on concern that slowing growth will curb demand.
Copper, Zinc Miners
Teck Resources Ltd. slipped 7.2 percent to C$28.69. Quadra FNX Mining Ltd. (QUX), which produces base metals in the U.S., Canada and Chile, fell 10 percent to C$8.14. Copper and zinc producer Inmet Mining Corp. (IMN) lost 6.2 percent to C$41.66, the lowest price since July 2009.
Rail companies dropped after Raymond James Ltd. cut Canada’s two biggest railway freight providers, saying industry carload growth is likely slowing.
European Goldfields Ltd. (EGU), which operates in southern Europe, advanced 15 percent to C$9.60, the biggest gain since October 2009. The Greece-focused miner that attracted investment from Qatar Holding LLC agreed on a $600 million Qatari loan, enabling it to fund its projects.
Birchcliff Energy Ltd. (BIR) gained 14 percent to C$11.61, the second-most in the S&P/TSX. The western Canadian oil and gas producer said it is looking for a buyer.
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