Canada Stocks Fall as Declining Phone Shares Offset Gold Rally

Canadian stocks fell, after a two-day advance, as declines among telephone and consumer-staples companies offset a rally among raw-material shares amid the first gain in commodities prices in five days.

Torex Gold Resources Inc. and Yamana Gold Inc. gained at least 3 percent as the price of the metal snapped three days of losses. Teck Resources Ltd. (TCK/B), Canada’s largest diversified miner, rose 1.4 percent as base metals prices advanced. Telus Corp. and BCE Inc. fell more than 1 percent as phone stocks retreated for the first time in nine days. BlackBerry Ltd. (BB) slumped 5.8 percent as investors continued to digest a potential $4.7 billion takeover by Fairfax Financial Holdings Ltd.

The Standard & Poor’s/TSX Composite Index (SPTSX) fell 12.18 points, or 0.1 percent, to 12,836.71 at 4 p.m. in Toronto. The benchmark Canadian equity gauge has surged 5.8 percent this quarter and is up 3.2 percent in 2013.

“Today, the market has gold going for it,” said Keith Richards, fund manager with ValueTrend Wealth Management in Barrie, Ontario. His firm manages about C$110 million ($107 million). “The banks have supported the TSX, but they’re maybe a bit overbought, so it’s time to take a pause. I don’t see what else could really drive the TSX. It needs a catalyst and there isn’t one right now.”

Commodities Prices

Raw-materials stocks gained 1.4 percent as a group, the only increase among 10 industries in the S&P/TSX. Trading volume was 2.8 percent lower than the 30-day average.

“From time to time you see rebounds there in commodities, but the prices are stuck in a range,” said Stephen Gauthier, chief investment officer with Fin-XO Securities Inc. in Montreal. His firm manages about C$550 million. “What you need to see that change is stronger growth worldwide. That’s what people are waiting for.”

Alongside improvements in Europe and China, economic data in the U.S. will need to show signs beyond growth in real estate, Gauthier said. A report today showed U.S. new home sales in August climbed 7.9 percent compared with a revised 14 percent plunge in July.

Alacer Gold Corp. surged 9.6 percent to C$3.42. The gold producer, which is selling mines in Australia, said yesterday it expects to decide on an expansion at its Copler operation in Turkey by the end of 2014.

Torex Gold added 4.3 percent to C$1.46 and Yamana Gold rose 3 percent to C$11.01. Gold for December delivery increased 1.5 percent to $1,336.20 an ounce in New York. The price had declined 3.9 percent in the past three sessions.

Endeavour Silver Corp. climbed 6.6 percent to C$4.71 as silver futures rose 1.4 percent, snapping a three-day, 7.3 percent slide.

Base Metals

Teck Resources rose 1.4 percent to C$28.58 and First Quantum Minerals Ltd. rallied 1 percent to C$19.27 as base metals including copper, aluminum, zinc, tin and lead advanced. Stockpiles of copper monitored by the London Metal Exchange fell for a 15th session.

Telus lost 2.2 percent to C$34.78 and BCE Inc. fell 1 percent to C$44.13 as telephone stocks slumped 1.1 percent, the first decline since Sept. 12. Telus, BCE and Rogers Communications Inc. have signaled their intent to bid in a wireless spectrum auction that didn’t include any submissions from major foreign companies.

CGI Group Inc. (GIB/A) rose 0.3 percent to C$36.85, a record high, after the technology services company said it has signed an eight-year deal worth 75 million British pounds ($121 million) with Smart DCC Ltd. to develop and operate a system to link gas and electricity meters for utility companies.

BlackBerry Slumps

BlackBerry, the smartphone maker, slumped 5.8 percent to C$8.27, the lowest close since November 2012.

On Sept. 23, BlackBerry said it had agreed to a tentative deal to sell itself to a group led by Fairfax, the largest company shareholder. The sale, for $9 a share in cash, is still subject to several conditions including securing financing and due diligence.

BlackBerry has plunged 24 percent in the past four days, since announcing on Sept. 20 worse-than-estimated earnings and smartphone sales for its second quarter and plans to fire 4,500 employees.

Consumer-staples shares slid 0.7 percent. Maple Leaf Foods Inc., the Canadian food processor, retreated 2.3 percent to C$13 for its fifth straight loss. Alimentation Couche-Tard Inc., the largest public convenience-store operator in North America, tumbled 2.4 percent to C$63.77.

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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