Canada Stocks Fall to Lowest in Month as Cyprus Optimism Fizzles

Canadian stocks fell to the lowest level in about a month, as raw-material and energy producers declined after enthusiasm for Cyprus’s bailout deal waned.

Yamana Gold Inc. (YRI) and Goldcorp Inc. lost at least 1.9 percent as gold slumped to a one-week low. AltaGas (ALA) Ltd. slid 3.2 percent after agreeing to buy power generator Blythe Energy LLC for $515 million. Agrium Inc. and Potash Corp. of Saskatchewan Inc. retreated at least 0.8 percent after an analyst cut his rating for the fertilizer sector. BlackBerry (BB) dropped 4.5 percent to extend losses a third day as Goldman Sachs Group Inc. lowered its rating on the stock.

The Standard & Poor’s/TSX Composite Index (SPTSX) fell 76.64 points, or 0.6 percent, to 12,680.71 at 4 p.m. in Toronto, the lowest level since Feb. 26. The S&P/TSX is up 2 percent for the year. Trading volume was in line with the 30-day average.

“The trading is all fallout from Cyprus,” Arthur Salzer, chief executive officer with Northland Wealth Management, said from Toronto. His firm oversees C$225 million ($220 million). “Investors with a short to mid-term outlook are throwing in the towel.”

Stocks opened higher, with the S&P/TSX index rising as much as 0.2 percent, and then erased gains as investors weighed whether the Cypriot bailout terms will be applied to other euro- area nations that need to recapitalize financial institutions in the future.

Cyprus, the euro-area’s third-smallest economy, agreed to shrink its banking system by shuttering its second-largest lender in return for a 10 billion-euro ($13 billion) bailout. Under the deal, senior Cypriot bank bond holders will take losses and uninsured depositors will be largely wiped out.

Gold Falls

Raw-materials producers contributed most to the S&P/TSX decline, falling 1.5 percent as a group. All 10 industries in the benchmark equity index retreated.

Gold dropped 0.1 percent to settle at $1,606.50. The metal slipped as much as 1.1 percent earlier. Yamana lost 3.3 percent to C$15.47 and Goldcorp declined 1.9 percent to C$33.67.

Agrium fell 1.5 percent to C$101.36 after Adam Samuelson, analyst with Goldman Sachs, lowered his rating for the fertilizer industry to neutral from attractive. Potash Corp., the world’s largest fertilizer maker, slid 0.8 percent to C$40.10.

First Quantum Minerals Ltd. (FM) dropped 3.5 percent to C$19.41, as copper futures for May delivery fell 0.6 percent to $3.445 a pound in New York. Stockpiles of copper in warehouses monitored by the London Metal Exchange expanded to the highest level since October 2003, LME data today showed.

AltaGas Acquisition

AltaGas slipped 3.2 percent to C$34.90 after saying it would issue C$352 million in stock to help pay for the acquisition of Blythe Energy, which owns a 507 megawatt natural gas-fired plant in California.

Pengrowth Energy Corp., the oil and gas producer, lost 3.4 percent to C$5.20. Cenovus Energy Inc. dropped 1.7 percent to C$31.40. Crude for May delivery advanced to a one-month high, adding 1.2 percent to settle at $94.81 a barrel.

BlackBerry fell 4.5 percent to C$14.51 after Simona Jankowski, analyst with Goldman Sachs, lowered her rating for the stock to neutral from buy following the U.S. debut of the smartphone maker’s new Z10 device last week.

“Our retail checks at over 20 store locations since March 22, including AT&T, Best Buy and Radio Shack, revealed a surprising lack of marketing support and poor positioning,” Jankowski said in a note to clients today.

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

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