Canada Stocks Little Changed as Gold Offsets Global Slump

Canadian stocks were little changed, erasing an earlier loss in the last minutes of trading, as a rally in gold companies offset a global equities selloff from the escalating Crimea conflict.

OceanaGold Corp. and Detour Gold Corp. (DGC) climbed at least 2.9 percent as the metal’s price surged. Osisko Mining Corp. advanced 6.4 percent after settling a lawsuit against Goldcorp Inc. (G) related to the latter’s hostile bid for the company. Magna International Inc. jumped to a record after reporting better-than-estimates profit. National Bank of Canada and Bank of Montreal each lost 1 percent as financial shares slumped. Lundin Mining Corp. dropped 3.6 percent as copper fell.

The Standard & Poor’s/TSX Composite Index (SPTSX) rose 3.15 points, or less than 0.1 percent, to 14,212.74 at 4 p.m. in Toronto, after dropping as much as 0.3 percent earlier in the day. The index has gained 4.3 percent this year.

“People are looking for a safe haven as a result of the conflict in Ukraine so investors are looking at gold,” said Anish Chopra, fund manager at TD Asset Management Inc. in Toronto. The firm manages C$218.3 billion ($196.9 billion). “There’s always a geopolitical risk premium when it comes to the pricing of oil, and this is playing a part as well.”

Ukraine put its forces on combat readiness over the weekend after Russian President Vladimir Putin got parliamentary approval to send troops into its southern neighbor. Ukraine said Russia’s navy ordered two of its ships in Crimea to surrender amid the worst standoff between the West and Russia since the end of the Cold War. A Russian Defense Ministry official denied the claim.

‘Extremely Serious’

Canadian Prime Minister Stephen Harper, speaking at a mining conference in Toronto, said the situation in Ukraine was “extremely serious” and Putin’s military action in Ukraine may mean Russia would leave the Group of Eight nations.

The tensions sent stocks tumbling around the world, with the MSCI All-Country World Index sliding 1.2 percent, the biggest decline in a month.

The S&P GSCI Index (SPGSCI) of 24 raw materials climbed 1.6 percent, the biggest increase in six months, paced by gains in oil on concern supplies will be disrupted by the conflict. Russia is the world’s largest energy exporter, and more than half of the country’s gas exports to the European Union flow through Ukraine.

Gold for April delivery rose 2.2 percent to $1,350.30 an ounce in New York, the highest settlement in more than four months. Gold is seen by many investors as a haven in times of increased market volatility.

Gold Shares

Raw-materials stocks jumped 0.7 percent as a group. Trading volume in the benchmark index was 12 percent lower compared with the 30-day average.

OceanaGold rose 4.5 percent to C$2.77 and Detour Gold rallied 2.9 percent to C$9.90 as 18 of 23 members of the S&P/TSX Gold Index advanced. The gauge of gold mining stocks increased 1.4 percent.

Fortuna Silver Mines Inc. jumped 3.1 percent to C$4.92 as silver for May delivery rose 1.1 percent.

Magna, the auto-parts manufacturer, soared 5.3 percent to C$103.75, a record high, after posting adjusted earnings of $2.33 a share. Analysts surveyed by Bloomberg had forecast $1.55.

Osisko, Goldcorp

Osisko Mining jumped 6.4 percent to C$7.50, the highest in a year, after settling a lawsuit against Goldcorp, which added 1.9 percent to C$30.32.

Goldcorp, which is trying to acquire Osisko for C$2.96 billion, said it has agreed to put its hostile bid on hold until April 15. As part of the agreement, Osisko will allow Goldcorp “full due diligence access to its business and assets” by April 1 and will not apply its shareholder rights plan.

Trilogy Energy Corp. gained 2.5 percent to C$28.80 and Canadian Natural Resources Ltd. rose 0.8 percent to C$40.83 as crude for April delivery climbed 2.3 percent to $104.92, the highest since September.

Industrial shares lost 0.6 percent as Air Canada decreased 2.8 percent to C$5.81. The carrier soared 323 percent last year, the biggest gain in the S&P/TSX.

Financial companies in the index tumbled 0.3 percent. Bank of Montreal slipped 1 percent to C$72.23 and National Bank of Canada dropped 1 percent to C$44.

Lundin Mining slumped 3.6 percent to C$5.07 and Teck Resources Ltd., Canada’s largest diversified miner, lost 1.3 percent to C$24.31 as copper fell to the lowest in 14 weeks in New York on weakening manufacturing in China, the world’s biggest consumer. An official Chinese manufacturing gauge released March 1 fell in February to an eight-month low of 50.2. Levels above 50 signal expansion.

To contact the reporters on this story: Eric Lam in Toronto at elam87@bloomberg.net; Callie Bost in New York at cbost2@bloomberg.net

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

Press spacebar to pause and continue. Press esc to stop.

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.