Canadian Stocks Fall as Euro Concern Offset Jobs Numbers

Canadian stocks fell, completing their biggest weekly drop this year, as financial, energy and material shares declined on renewed concern over Europe’s debt crisis, even as commodity prices rallied on U.S. jobs data.

Canadian Imperial Bank of Commerce, the country’s fifth- biggest lender, dropped 1.4 percent. Suncor Energy Inc., the country’s largest oil and gas producer, lost 2.6 percent. First Quantum Minerals Ltd. (FM) Canada’s second-largest copper producer, rose 7.1 percent on takeover speculation.

The Standard & Poor’s/TSX Composite Index (SPTSX) declined 75.55 points, or 0.6 percent, to 12,103.11 in Toronto. The index fell 2.3 percent this week, the worst slide since Dec. 16. The Canadian market is closed tomorrow for the Good Friday holiday.

“People are probably thinking that the strong job numbers are more of an anomaly than a true fact that will carry on for the next few quarters,” Sadiq Adatia, chief investment officer at Sun Life Global Investments in Toronto, said in a telephone interview. The unit of Sun Life Financial Inc. oversees about C$4.4 billion ($4.4 billion) for clients. “If there are issues in Europe, the risk appetite is off and you’ll likely see pressure on the Canadian dollar.”

The benchmark equity gauge rose 3.7 percent in the first quarter this year as economic data surpassed estimates and investors speculated that the euro area would contain its sovereign-debt crisis. Concerns over Europe were revived this week as French borrowing costs rose at an 8.44 billion euro ($11 billion) auction of debt today, and Spanish bonds fell for a third day after Prime Minister Mariano Rajoy said yesterday the nation faces “extreme difficulty.”

Financial Shares

CIBC fell 1.4 percent to C$75.37, leading a third-straight day of declines for financial shares in the S&P/TSX. Toronto- Dominion Bank, the country’s second largest lender, decreased 0.4 percent to C$83.34. Royal Bank of Canada, the country’s biggest lender, dropped 0.4 percent to C$56.96.

National Bank of Canada (NA), the country’s sixth-biggest bank by assets, fell 1 percent to C$78.67 after being sued by current and former employees of its Natcan asset management unit, who argue that the bank unfairly bought them out at a discount before selling the business to Fiera Sceptre Inc. (FSZ)

Claude Breton, a National Bank spokesman, declined to comment.

Canadian energy shares fell, even as oil futures rose for the first time in three days. Suncor Energy lost 2.6 percent to C$30.45. Canadian Natural Resources Ltd. (CNQ) slipped 2.9 percent to $31.77.

Jobless Benefits

Claims for U.S. unemployment benefits dropped last week to the lowest level in four years, the Labor Department reported today. Canada added the most jobs since 2008 last month. Employment rose by 82,300 following a decline of 2,800 in February, Statistics Canada said in Ottawa, lowering the jobless rate to 7.2 percent from 7.4 percent.

Canadian Pacific Railway Ltd. (CP), the nation’s No. 2 rail carrier declined 0.5 percent to C$75 as Pershing Square Capital Management’s Chief Executive Officer William Ackman pushed the company for a leadership change.

Ackman said CP Rail is losing market share to rivals under Chief Executive Officer Fred Green. The shares have rallied 25 percent since Oct. 27, the day before Pershing Square disclosed its stake.

Barrick, Goldcorp

Materials companies in the benchmark index fell, led by gold shares. Barrick Gold Corp. (ABX), the world’s largest producer of the metal, declined 2 percent to C$40.36. Goldcorp Inc. (G), the second-biggest bullion miner, dropped 1 percent to C$40.60.

“Investors probably came to the realization that the markets got a little bit ahead of themselves in the first quarter,” Adatia said. “People focused a little too much on the short-term. Now you’ll hopefully start to see people focusing back on the longer-term issues.”

First Quantum gained 7.1 percent to C$19.69 after U.K. newspapers speculated that the company may be a takeover target. It was the company’s biggest increase in more than four months.

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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