Most Canadian Stocks Decline as Gold Shares Tumble
Gold companies in the Standard & Poor’s/TSX Composite Index plunged 2.4 percent, extending their loss since June 18 to 8 percent. SouthGobi Resources Ltd. (SGQ) tumbled 25.9 percent, the most since 2008. Sun Life Financial Inc. (SLF) and Manulife Financial Corp. (MFC) helped lead the industry’s rally, climbing at least 1.9 percent.
In the S&P/TSX (SPTSX), 132 companies declined and 108 advanced. The index advanced 4.03 points, or less than 0.1 percent, to 11,334.42 after losing as much as 0.7 percent earlier. The index has fallen 1.6 percent in June, heading for a fourth straight monthly decline.
“The focus continues to be the macroeconomic and that remains with Europe,” Jeffrey Bradacs, whose team at Manulife Asset Management manages C$1.7 billion, said in a phone interview. “The issues in Europe continue to weigh on the markets and that continues to weigh on risk-based names and commodity-based names.”
Concern over the European debt crisis intensified today as Spanish and Italian bonds fell and the euro weakened as borrowing costs increased at debt sales. Canadian stocks fell yesterday, sending the benchmark index to the lowest level since May 18, on concern European leaders may fail to calm the debt crisis during a summit this week. German Chancellor Angela Merkel reiterated her opposition to a shared debt burden in the region.
Potash Corp. of Saskatchewan Inc., the largest fertilizer producer, gained 3.1 percent to C$43.53 as corn climbed to the highest level in more than nine months on speculation that hot, dry weather during the next two weeks will reduce yields in the U.S., the world’s largest grower.
Barrick Gold Corp. (ABX), the world’s largest producer, fell 4 percent to C$37.83 as gold declined for the first time in three sessions.
SouthGobi fell 26 percent to C$4. The company cut output as prices and customer purchases declined and the company awaits a regulatory notification on a plan by Aluminum Corp. of China Ltd. to acquire the Mongolian coal producer.
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