Canada Stocks Drop Most Since June as Silver, Oil Slumps

Canadian stocks fell, for the biggest drop since June, as a decline in gold and silver spurred losses in metal producers and energy companies slumped the most in eight weeks.

B2Gold Corp. (BTO) plunged 13 percent to pace declines among gold mining companies after announcing a $225 million note offering. Endeavour Silver Corp. and Silvercorp Metals Inc. slipped at least 2.9 percent as the price of the metal snapped the longest winning streak since January. Penn West Petroleum Ltd. and Bonterra Energy Corp. retreated more than 1.2 percent as crude fell.

The Standard & Poor’s/TSX Composite Index (SPTSX) fell 148.90 points, or 1.2 percent, to 12,588.02 at 4 p.m. in Toronto. The index has gained 1.2 percent this year, the third-worst performance among developed markets ahead of Singapore and Hong Kong.

“Nothing goes up forever, the gold commodity had a good run as well as the stocks last week and they’re taking a bit of a pause today,” said John Kinsey, a fund manager with Caldwell Securities Ltd. in Toronto. The firm manages about $1 billion. “The financials are down today, with the usual headwinds of mortgages and housing still present. It’s been a case of going up one day and then back down the next, and that’s going to continue to the end of the month when the banks report earnings.”

Financial stocks declined 0.9 percent as all 10 industries in the S&P/TSX retreated. Trading volume was 17 percent lower than the 30-day average at this time of the day.

BMO, Scotiabank

Bank of Montreal (BMO) lost 0.7 percent to C$63.96 and Bank of Nova Scotia slipped 0.2 percent to C$58.12. The two banks will report their third-quarter earnings on Aug. 27, the first of Canada’s major banks to do so for this period.

BMO is expected to report adjusted earnings of C$1.53 a share and Scotiabank (BNS) C$1.31 a share, according to analysts surveyed by Bloomberg.

Penn West Petroleum sank 4.5 percent to C$11.78 and Canadian Natural Resources Ltd. fell 2.6 percent to C$30.67 as 55 of 58 members of the S&P/TSX Energy Index fell. The energy index lost 1.7 percent, the biggest decline since June 20.

Crude fell for the first time in seven days as the threat of a storm in the Gulf of Mexico dissipated, removing a risk to oil and gas production. Crude for September delivery fell 0.3 percent to $107.10 a barrel in New York.

B2Gold sank 13 percent to C$2.95, the biggest loss in almost five years. The gold producer, with mines in Nicaragua, Colombia and Uruguay, said it was raising the debt for “general corporate purposes.”

Silvercorp Metals lost 5.1 percent to C$3.75 and Endeavour Silver fell 2.9 percent to C$5.28 as silver for December delivery retreated 0.7 percent to $23.22. The price of silver advanced for seven straight days before today.

Bombardier Flight

Bombardier Inc. dropped 1.8 percent to C$4.79. Cameron Doerksen, analyst with National Bank Financial, said in a note to clients that the entry into service of the company’s CSeries jet may be pushed into early 2015.

Utilities stocks plunged 2.8 percent for a three-year low, as 10 of 11 companies in the group declined amid a rise in bond yields. Algonquin Power & Utilities Corp. fell 4.3 percent to C$6.64 and TransAlta Corp. retreated 2.1 percent to C$13.84.

The S&P/TSX Utilities Index yielded 5 percent in dividends in the second quarter, compared with 3.2 percent for the S&P/TSX, data compiled by Bloomberg show.

U.S. Treasury yields jumped to the highest level since 2011 today amid speculation the Federal Reserve will trim its bond purchasing program next month.

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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