Canada Stocks Fall to 1-Month Low as Alcoa Cuts Aluminum Outlook

Canadian stocks fell to the lowest level in almost five weeks after Alcoa Inc. cut its aluminum outlook on weakening demand in China, the world’s biggest commodities consumer.

Niko Resources Ltd., an oil and gas explorer, slumped 8.5 percent. Enbridge Inc. (ENB) retreated 1 percent. AuRico Gold Inc. (AUQ) surged 21 percent after selling mining properties in Mexico to billionaire Carlos Slim’s Minera Frisco SAB. Centerra Gold Inc. (CG) jumped 5.1 percent after analysts at Canaccord Genuity raised the stock’s rating.

The Standard & Poor’s/TSX Composite Index (SPTSX) retreated 61.15 points, or 0.5 percent, to 12,212.42 in Toronto, its lowest level since Sept. 6. The benchmark equity gauge is up 2.2 percent this year. Energy and bank shares contributed the most to losses in the S&P/TSX as seven of 10 industries retreated.

“Alcoa is rephrasing what we’ve been seeing all along,” Pat McHugh, senior managing director and Canadian equity strategist with Manulife Asset Management Ltd., said from Toronto. The firm manages about $218 billion. “China is slowing down and Europe is in recession and getting worse.”

Alcoa (AA), the largest U.S. aluminum producer, cut its forecast for global consumption of the metal by 1 percentage point on slowing Chinese demand, the company said yesterday. The International Monetary Fund said today European banks may need to sell as much as $4.5 trillion in assets through 2013 if policy makers fall short of pledges to stem the fiscal crisis, up 18 percent from its April estimate.

Energy Shares

Niko Resources, the worst-performing stock in the S&P/TSX this year, fell 8.5 percent to C$14.93. Enbridge retreated 1 percent to C$39.46. Suncor Energy Inc. (SU) declined 1.2 percent to C$32.29 and Cenovus Energy Inc. (CVE) lost 1.5 percent to C$33.68.

Crude for November delivery slipped 1.2 percent to settle at $91.25 a barrel in New York.

AuRico Gold jumped 21 percent to C$7.60, its biggest gain since November 2008. The company agreed to sell its Ocampo mine and several other projects under development in the Chihuahua and Nayarit states to Slim’s Minera Frisco for $750 million. Slim is the world’s richest person, according to the Bloomberg Billionaires Index.

Centerra advanced 5.1 percent to C$12.38 after Steven Butler, analyst with Canaccord Genuity, raised the stock to a buy from a hold and increased his price target to C$16.50 from C$8.70 on reduced risk of government intervention at its Kumtor mine in Kyrgyzstan.

“The shares offer good risk-reward at current prices,” he said in a research note today.

Metal Producers

Kinross Gold Corp. (K), Canada’s third-largest gold producer by sales, gained 0.7 percent to C$10.25 after saying Chief Financial Officer Paul Barry will leave the company to pursue other interests. Kinross fired its chief executive officer, Tye Burt, two months ago, replacing him with J. Paul Rollinson.

Keegan Resrouces Inc. (KGN), a metals exploration company, rose 18 percent to C$3.58, the most since February 2009 after increasing its estimate for the amount of gold at the Esaase project in Ghana. The company said the site has a measured and indicated gold resource of 3.83 million ounces, compared with a September 2011 estimate of 3.64 million ounces.

Gold futures for December delivery rose 10 cents to settle at $1,765.10 in New York.

To contact the reporter on this story: Eric Lam in Toronto at elam87@bloomberg.net

To contact the editor responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net