Canadian Bank Stocks Fall After Europeans Postpone Aid Decision
Canada’s main stock index was little changed as banks fell after European officials postponed a decision on an aid package for Greece, while energy stocks rose.
Bank of Montreal (BMO), Canada’s fourth-biggest lender by assets, declined 0.6 percent after Euro-region finance ministers canceled an in-person meeting scheduled for today. Suncor Energy Inc. (SU), the country’s biggest oil and gas producer, gained 1.5 percent as crude advanced to the highest in a month. Canadian National Railway Co. (CNR), the country’s largest railroad, lost 0.9 percent as North American carriers retreated on concern coal shipping will drop.
The S&P/TSX Composite Index (SPTSX) climbed 7.56 points, or 0.1 percent, to 12,362.03 Toronto time after closing at a three-week low yesterday.
“The market is waiting for continued good news,” Greg Eckel, a money manager at Morgan Meighen & Associates Ltd. in Toronto, said in a telephone interview. The firm oversees about C$1 billion ($1 billion). “The bias is to run a little skittish until some more information comes out that can establish some firmer footing as to the way forward” on Greece.
The S&P/TSX has lost 0.7 percent this month after rallying 4.2 percent in January. Gold stocks led the decline as the U.S. dollar advanced on concern Greece’s efforts to reduce its budget deficit won’t avert a default. Seven of the world’s 20 largest gold companies by revenue are Canadian, according to Bloomberg data.
The group of Euro-region finance ministers won’t decide on the new Greek rescue package until its next meeting on Feb. 20, Luxembourg Prime Minister, Jean-Claude Juncker, the panel’s chairman, said yesterday. Instead of meeting in person today, the finance chiefs held a conference call.
The S&P/TSX Commercial Banks Index (STCBNK) fell for the first time in three days. BMO dropped 0.6 percent to C$57.94. Royal Bank of Canada (RY), the country’s largest lender by assets, slipped 0.3 percent to C$53.46. Mortgage insurer Genworth MI Canada Inc. declined 1.2 percent to C$21.30.
Energy companies advanced after the U.S. Energy Department said crude supplies retreated last week. Most analysts in a Bloomberg survey had forecast an increase.
Suncor increased 1.5 percent to C$34.22 after Highfields Capital Management LP reported it boosted its stake in the company. Talisman Energy Inc. (TLM), an oil and gas producer with operations in North America, the North Sea and Indonesia, climbed 4.9 percent to C$13.13 after cutting its exploration- spending forecast.
Cenovus Energy Inc. (CVE), Canada’s fifth-biggest energy company, slid 1.4 percent to C$38.08 after reporting fourth-quarter earnings that missed the average estimate of analysts in a Bloomberg survey by 17 percent, excluding certain items.
Canada’s two publicly traded railroads retreated along with their U.S. peers after Matthew Troy, an analyst at Susquehanna Financial Group LLLP, said in a note dated yesterday that rail stocks “will struggle in the first quarter as investors digest the reality that coal will be weak through the first half and earnings-per-share revisions skew downward in coming weeks.” Railroad coal shipping has fallen this year from the same period of 2011, according to the Association of American Railroads.
CN dropped 0.9 percent to C$77.55. Canadian Pacific Railway Ltd. (CP) declined 2.2 percent to C$73.03.
Harry Winston Diamond Corp. (HW), a diamond-mining company and jewelry retailer, rallied 9.2 percent, the most in a year, to C$13.01 after Oliver Chen, an analyst at Citigroup Inc., began coverage of the company with a “buy” rating. Diamond prices are likely to increase due to limited supply and growing demand from emerging markets, Chen wrote in a note to clients.
The S&P/TSX Materials Index (STMATR) slipped less than 0.1 percent, extending its streak of declines to nine days, the longest since June 2001. Teck Resources Ltd. (TCK/B), Canada’s largest base-metals and coal producer, lost 1.3 percent to C$38.48 as copper retreated for a fourth day on the Comex in New York. First Quantum Minerals Ltd. (FM), the country’s second-biggest publicly traded copper producer, decreased 1.1 percent to C$21.93.
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