Canada Stocks Fall Amid Earnings as Fed Cuts Stimulus Measures

Canadian stocks declined following disappointing corporate earnings, as investors weighed the U.S. Federal Reserve’s decision to reduce stimulus amid turmoil in emerging markets.

CGI Group Inc. plunged 5 percent after first-quarter earnings missed estimates. AGF Management Ltd. slumped 6.3 percent as quarterly profit trailed forecasts. Air Canada dropped 6 percent, extending its slide to a fifth day. Detour Gold Corp. paced gains among miners as gold and silver prices gained amid a rout in emerging-market currencies that spurred demand for the precious metals.

The Standard & Poor’s/TSX Composite Index (SPTSX) decreased 44.56 points, or 0.3 percent, to 13,643.10 at 4 p.m. in Toronto. The slump trimmed the gauge’s advance this year to 0.2 percent. Trading in S&P/TSX stocks was 12 percent higher than the 30-day average.

“There seems to be mixed signals in how investors should react to emerging markets and violent currency movements,” Barry Schwartz, a fund manager with Baskin Financial Services Inc., said in a phone interview from Toronto. His firm manages C$600 million ($538.1 million). “There’s a debate to whether the Fed will taper or not taper. None of the economic data is concerning, so our feeling is once again, stocks should react to earnings.”

The Fed today announced plans to press on with another $10 billion reduction in monthly bond purchases intended to speed a recovery from the worst recession since the Great Depression.

Metals Demand

A Bloomberg gauge tracking 20 emerging-market currencies fell to the lowest since April 2009 today even as central banks from South Africa to Turkey tightened monetary policy to bolster their currencies.

Gold for April delivery rose the most in a week, while silver futures advanced 0.3 percent.

Six of 10 main industries in the index retreated. Energy and financial stocks fell at least 0.7 percent, contributing the most to the index’s slide.

CGI plunged 5 percent to C$33.47, the lowest since September. The information-technology company that worked on the Obamacare health exchange software reported first-quarter adjusted earnings of 65 Canadian cents per share, less than analysts’ profit estimates of 70 Canadian cents per share.

Asset Manager

AGF slid 6.3 percent to C$11.63 for a sixth day of losses that left the stock at its lowest since July. The investment-management firm reported fourth-quarter earnings of 11 Canadian cents per share, less than the 12 Canadian cents per share analysts forecast.

Air Canada tumbled 6 percent to C$7.17. The carrier’s shares have lost 28 percent in five days of declines. The stock was the best performer on the S&P/TSX in 2013, soaring 323 percent.

Raw-materials producers gained 1.7 percent and an index of gold miners added 3.8 percent to the highest level since September. Detour soared 14 percent to C$7.25 and Barrick Gold Corp. jumped 4.2 percent to C$21.83, the highest since June.

Silvercorp Metals Inc. increased 6.2 percent to C$3.07 to pace gains among producers of the metal.

To contact the reporter on this story: Callie Bost in New York at cbost2@bloomberg.net

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

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