Canadian Stocks Fall as Debt-Crisis Agreement Eludes Europeans

Canadian stocks fell after metals and oil dropped as Germany and France clashed on plans to enhance a rescue fund to help solve the continent’s debt crisis before this weekend’s scheduled summit of European leaders.

Barrick Gold Corp (ABX), the world’s largest gold producer, declined 1.6 percent as the metal declined for a fourth day. Perpetual Energy Inc. (PMT), which produces natural gas in Canada, plunged 25 percent after suspending its dividend. Agrium Inc. (AGU), a fertilizer producer and farm retailer, gained 1.7 percent after an analyst at JPMorgan Chase & Co. raised his rating on the company.

The Standard & Poor’s/TSX Composite Index retreated 19.17 points, or 0.2 percent, to 11,830.33.

“Whatever transpires this weekend could have a large impact on the market, so the prudent thing to do right now is wait, and that’s what we’re seeing,” Jennifer Dowty, a money manager at Manulife Financial Corp.’s asset-management unit, said in a telephone interview from Toronto. The unit oversees C$209 billion ($205 billion). “It’s a very dangerous time for investors to be going long.”

The index has swung between gains and losses over the past two weeks as European leaders have sought ways to prevent the continent’s sovereign-debt crisis from damaging banks and the broader economy. The S&P/TSX rose or fell at least 100 points 10-straight days through yesterday, the longest such streak ever for Canada’s benchmark gauge for stocks.

The index dropped as much as 1.3 percent after Die Welt said Germany hadn’t ruled out postponing a European Union summit planned for Oct. 23. Stocks pared their losses when German Chancellor Angela Merkel and French President Nicolas Sarkozy said European leaders will meet twice over the next six days.

Gold futures declined for a fourth straight day. Barrick retreated 1.6 percent to C$44.94. Goldcorp Inc. (G), the world’s second-largest producer of the metal by market value, lost 0.7 percent to C$45.01.

Agnico-Eagle Mines Ltd. (AEM), the gold producer that plunged 18 percent yesterday after suspending operations at a mine in Quebec due to flooding, decreased another 6.4 percent to C$44.30. Agnico-Eagle doubled the cash component of its cash- and-share offer for Grayd Resources Corp. Grayd rose 8.7 percent to C$2.50.

Semafo Inc. (SMF), which mines gold in West Africa, rebounded 5 percent to C$7.32 after tumbling 8.2 percent yesterday. Recent drilling results at its Mana mine in Burkina Faso are “encouraging,” Nana Sangmuah, an analyst at Clarus Securities Inc., said in a note to clients dated yesterday.

Dividend Suspended

Perpetual Energy slumped 25 percent, the most since 2003, to a record-low C$1.74. The company cited low natural gas prices, which sank 26 percent from June 8 to yesterday, for the dividend suspension.

Delphi Energy Corp. (DEE), a western Canadian natural gas and oil producer, soared 14 percent to C$2.08. Pennant Energy Inc. (PEN)’s drilling results on land in Alberta next to Delphi’s should prove positive for Delphi, Brian Kristjansen, an analyst at Canaccord Financial Inc., said in a note to clients. Pennant’s shares have jumped 185 percent over the past week to 28.5 Canadian cents.

Cameco Corp. (CCO), the world’s largest uranium producer, retreated 3 percent to C$19.91, extending its two-day drop to 5.6 percent. The shares fell after Hathor Exploration Ltd. agreed to be bought by Rio Tinto Group. Cameco had launched an unsolicited bid for Hathor.

Agrium gained 1.7 percent to C$75.68 after Jeffrey J. Zekauskas, an analyst at JPMorgan, boosted his rating on the company to “overweight” from “neutral.” “Reduced nitrogen exports from China, recent strong nitrogen demand from India and the imposition of seasonally high export taxes in China beginning in November” point to higher fertilizer prices, Zekauskas said in a note to clients.

Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, increased 0.8 percent to C$49.20.

The S&P/TSX Financials Index climbed after the Federal Reserve Bank of Philadelphia said manufacturing expanded this month in the region comprising eastern Pennsylvania, southern New Jersey and Delaware. Also, companies including Fifth Third Bancorp and Union Pacific Corp. reported quarterly earnings that surpassed the average analyst estimates in Bloomberg surveys.

Toronto-Dominion Bank (TD), Canada’s second-largest lender by assets, rose 0.5 percent to C$73.72. Bank of Montreal (BMO), the country’s fourth-biggest lender, gained 0.7 percent to C$58.87. Money manager CI Financial Corp. (CIX) advanced 1 percent to C$19.98.

To contact the reporter on this story: Matt Walcoff in Toronto at mwalcoff1@bloomberg.net

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net

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