Canadian Stocks Fall on Missed Durable Goods Forecast

Canadian stocks declined the most in two weeks, led by materials and energy shares, after orders for U.S. durable goods rose less than projected in February.

Goldcorp Inc. decreased 0.9 percent as a strike by jewelers in India curbed demand. First Quantum Minerals Ltd. (FM), Canada’s second-largest publicly traded copper producer, fell 3 percent on indications that demand for the metal is weakening in China. Canadian Natural Resources Ltd. (CNQ), the country’s second-largest energy company by market value, declined 1.6 percent after U.S. oil inventories climbed the most in 20 months last week.

The Standard & Poor’s/TSX Composite Index (SPTSX) fell 98.18 points, or 0.8 percent, to 12,413.86 in Toronto for the biggest decline since March 14.

“In Canada, energy and materials are two of the most economically sensitive sectors,” Pat McHugh, senior managing director and Canadian equity strategist at Manulife Financial Corp.’s asset-management unit, said in a telephone interview. The unit oversees about $217 billion. “Anything that indicates a weakness in the economy, whether consumer or capital goods related, would impact them negatively. I’m not surprised they’re taking it on the chin today.”

The benchmark equity gauge increased 0.4 percent this week through yesterday after rising to a three-week high on Monday, led by commodity producers. The index fell 1 percent in March through yesterday, heading for its first monthly decline of the year, as materials and energy shares have declined due to growing concern that demand may slow in China and rising crude stockpiles.

India Strike

Canadian gold companies declined as futures fell for a second straight day after a trade group said jewelers in India, the world’s biggest buyer, will extend a nationwide strike until the government withdraws a levy on non-branded products.

Goldcorp (G), the world’s second-biggest gold producer by market value, decreased 0.9 percent to C$44.45. Jaguar Mining Inc. (JAG), which produces gold in Brazil, dropped 6.1 percent to C$4.78.

Copper shares dropped as the metal fell the most in three weeks after Jiangxi Copper Co. (358), China’s top producer, recorded an 18 percent decline in second-half 2011 profit and Goldman Sachs Group Inc. cut its three-month outlook for raw materials.

First Quantum Minerals fell 3 percent to C$18.27. Ivanhoe Mines Ltd., Rio Tinto Group’s majority-owned partner in the Oyu Tolgoi copper project in Mongolia, decreased 3.6 percent to C$15.52.

Energy companies in the S&P/TSX fell for a second day after U.S. oil inventories increased 7.1 million barrels to 353.4 million, the most since July 2010 and more than twice the gain predicted in a Bloomberg News survey of analysts. Oil also fell after French Industry Minister Eric Besson said the U.S. proposed releasing oil from strategic reserves.

Canadian Natural Resources declined 1.6 percent to C$32.83. Suncor Energy Inc. (SU), Canada’s largest oil and gas producer, decreased 1.3 percent to C$32.47.

To contact the reporter on this story: Joseph Ciolli in New York at jciolli@bloomberg.net

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

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