Canada Stocks Fall After Fed Statement as Potash Companies Slump

Canadian stocks fell for a second day as shares of potash and gold producers slumped and the U.S. Federal Reserve refrained from indicating when it will reduce the pace of stimulus.

Potash Corp. of Saskatchewan Inc. and Agrium Inc. fell at least 2.3 percent, extending declines to a second day. Rubicon Minerals Corp. and Alacer Gold Corp. lost more than 8 percent as the price of the metal slipped. CGI Group (GIB/A) Inc. soared 9.8 percent to a record after topping earnings and revenue estimates. Intact Financial Corp. climbed 2.8 percent as second-quarter operating earnings beat forecasts.

The Standard & Poor’s/TSX Composite Index (SPTSX) slipped 95.11 points, or 0.8 percent, to 12,486.64 at 4 p.m. in Toronto. The gauge advanced 3 percent this month, the largest monthly gain since September 2012. Trading volume was 16 percent higher than the 30-day average.

Canada’s economy is expanding very slowly,” said Anish Chopra, a fund manager with TD Asset Management Inc. The firm manages C$216 billion ($210 billion). “Investors are looking for confirmation things are continuing to grow, albeit slowly, before they have the confidence to re-enter the market.”

Canadian gross domestic product rose 0.2 percent in May after a 0.1 percent gain in April. Economists had forecast a 0.3 percent increase. The U.S. economy grew at a 1.7 percent annualized rate in the second quarter, ahead of the median forecast for a 1 percent advance according to a Bloomberg survey of economists.

Fed Guidance

The U.S. Fed repeated the pledge it has used since September that it will continue its bond purchases until the U.S. labor market outlook has improved substantially. Policy makers also left unchanged their commitment to hold the target interest rate near zero as long as the jobless rate remains above 6.5 percent and the outlook for inflation over one to two years doesn’t exceed 2.5 percent.

Raw-material producers fell the most in the S&P/TSX, losing 2.5 percent as a group. Eight of 10 industries in the Canadian equity benchmark declined. Technology stocks climbed 5.2 percent as a group for the biggest increase in three months.

Potash Corp. slumped 8.5 percent to C$29.88, a three-year low, and Agrium lost 2.3 percent to C$87.14. Potash Corp. has plunged 23 percent in the past two days.

OAO Uralkali (URKA), the biggest supplier of the fertilizer potash in the world, said yesterday that it would end production restrictions that had underpinned global prices and suspend a venture with a Belarusian miner that controlled exports from the former Soviet Union.

Shares in gold miners declined as the price of the precious metal fell as much as 1.5 percent. Rubicon Minerals lost 8.1 percent to C$1.36 and Alacer Gold dropped 8 percent to C$2.43.

CGI Jumps

CGI Group, an information and business services provider, jumped 9.8 percent to C$35.50 after reporting third-quarter adjusted earnings of 63 Canadian cents a share, compared with estimates for 58 cents. Revenue of C$2.57 billion topped analysts’ estimates for C$2.53 billion.

CGI, based in Montreal, booked C$2.8 billion in new contracts, extensions and renewals in the quarter, bringing total bookings in the past year to C$9.3 billion. The company’s backlog of signed orders jumped 38 percent to C$18.7 billion compared with the same period last year.

BlackBerry Ltd. (BB) climbed 1 percent to C$9.02 for a second day of gains. The Waterloo, Ontario-based smartphone maker said yesterday that it will introduce the Q5 cellphone with a physical keyboard in Canada on Aug. 13, to complement its Z10 and Q10 models.

Intact Financial, a property and casualty insurer, gained 2.8 percent to C$60.41. The company reported second-quarter operating earnings of 89 Canadian cents a share, ahead of the 75-cent estimate of analysts surveyed by Bloomberg.

Charles Brindamour, chief executive officer at Intact, said the company’s performance “remained sound” after providing C$300 million to customers affected by severe flooding in Alberta in June.

Athabasca Oil Corp. added 3.3 percent to C$7.21 and Calfrac Well Services Ltd. gained 6.2 percent to C$34.05. Oil prices climbed 8.8 percent this month, the biggest gain since August. Crude rose $1.95 percent to $105.03 a barrel.

To contact the reporters on this story: Eric Lam in Toronto at elam87@bloomberg.net; Katie Brennan in New York at kbrennan23@bloomberg.net

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

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.