Canada Stocks Fall as Europe Concerns Overshadow Retail Gains

Canadian stocks fell for the third time in four days as concern about Europe’s debt crisis overshadowed a rise in Canadian retail sales and better-than- estimated U.S. economic data.

Bankers Petroleum Ltd. and Canadian Natural Resources Ltd. dropped at least 2.5 percent as oil fell 1.1 percent. Financial shares slumped as Royal Bank of Canada and Canadian Imperial Bank of Commerce lost more than 1 percent. Corus Entertainment Inc. slid 3.4 percent after an RBC Capital Markets analyst downgraded the media company. OceanaGold Corp. soared 10 percent after Edison Investment Research predicted a “transformational year” for the mining company.

The Standard & Poor’s/TSX Composite Index (SPTSX) fell 78.68 points, or 0.6 percent, to 12,747.87 at 4 p.m. in Toronto. The S&P/TSX has risen 2.5 percent this year. Trading volume was 5.1 percent below the 30-day average. Nine of 10 groups in the benchmark index retreated.

“Putting the European debt crisis back on the front burner created a bit of hesitation,” Bob Decker, who helps oversee C$6 billion ($6 billion) at Aurion Capital Management Inc. in Toronto, said in a phone interview. “It’s created a bit of a light volume sell-off.”

Canadian equities slumped as German manufacturing unexpectedly contracted and Cyprus worked to obtain a European bailout. The European Central Bank said it may cut Cypriot banks off from emergency funds after March 25 while the island nation’s president, Nicos Anastasiades, tried to forge agreement on a plan to stave off financial collapse.

Oil Slides

A purchasing managers’ index for Germany’s manufacturing indicated contraction in the sector, adding to signs the euro- area economy is struggling to emerge from a recession. Oil retreated to a two-week low, with crude for May delivery sliding $1.05 to settle at $92.45 a barrel.

Bankers Petroleum dropped 2.7 percent to C$2.84. The oil and gas producer appointed David Lawrence French as its president and chief executive officer following the retirement of Abdel Badwi. Canadian Natural Resources fell 2.5 percent to C$32.79, and Encana Corp. retreated 2.1 percent to C$19.51.

Retail sales in Canada gained 1 percent in January to recoup some of the previous month’s 2.3 percent plunge on advances at auto dealerships and department stores, a sign the economy may be recovering.

In the U.S., fewer Americans than forecast filed jobless claims last week. Other reports showed sales of previously owned U.S. homes rose to the highest level in more than three years in February, and a gauge of leading economic indicators topped estimates for last month.

Banks Retreat

Banks, industrial shares and telephone companies retreated the most out of 10 groups in the benchmark Canadian equities index, sliding at least 0.8 percent. Royal Bank of Canada fell 1 percent to C$60.74 and Canadian Imperial Bank of Commerce lost 1.4 percent to C$81.09.

Canadian Pacific Railway Ltd. dropped 2.1 percent to C$129.24, while Canadian National Railway Co. lost 2.5 percent to C$98.84. Intermodal rail traffic in North America climbed at the slowest rate this year in the week ended March 16 compared with a year ago, Association of American Railroads data show.

Corus Entertainment slumped 3.4 percent to C$25.22. RBC Capital Markets equity analyst Haran Posner reduced his rating on the Toronto-based company to sector perform from outperform.

OceanaGold surged 10 percent to C$2.92, for its biggest gain since October 2011. Edison Investment Research said “promising exploration results” at the company suggest a new source of low-cost gold production and higher earnings.

To contact the reporter on this story: Nikolaj Gammeltoft in New York at ngammeltoft@bloomberg.net

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

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