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Canadian Stocks Decline as Copper Retreats on China Data

Canadian stocks fell the most in a month as copper declined on weaker-than-estimated industrial output in China and while earnings from Transat AT Inc. and Empire Co. (EMP/A) trailed estimates.

Transat AT plunged 17 percent after reporting a loss due in part to the declining Canadian dollar. Empire sank 3 percent after posting earnings that fell 32 percent short of estimates. Bombardier Inc. rallied 2.7 percent after analysts at RBC Capital Markets raised their rating for the stock. Teck Resources Ltd. and First Quantum Minerals Ltd. dropped more than 2 percent as copper traded near a 44-month low. BlackBerry (BB) Ltd. fell a seventh day, the longest losing streak in two years.

The Standard & Poor’s/TSX Composite Index (SPTSX) lost 73.86 points, or 0.5 percent, to 14,245.14 at 4 p.m. in Toronto, the most since Feb. 3. The index has gained about 4.6 percent this year.

Global stocks fell, with the MSCI All-World Index slumping 0.9 percent to a one-month low. The S&P 500 lost 1.2 percent, erasing its gains for the year.

“The Canadian market is trying to find its footing here amid contrasting data from China and the U.S.,” said Patrick Blais, a fund manager at Manulife Asset Management Ltd. in Toronto. He helps manage about C$265 billion ($240 billion) at the firm. “Copper has taken a massive hit and there could be further downside if data from China continues to weaken. In the U.S., markets have been willing to dismiss recent weak data points because of weather. It definitely needs to show the economy is on track or markets may pull back.”

Industrial production in China grew 8.6 percent in the first two months of 2014, China’s statistics bureau said today. Analysts surveyed by Bloomberg had forecast a 9.5 percent advance. Copper for May delivery fell 1.3 percent to $2.923 a pound for the fourth decline in five days.

Copper Resumes Slide

Teck Resources (TCK/B), Canada’s largest diversified miner, slipped 2.4 percent to C$22.70 and First Quantum Minerals Ltd. lost 2 percent to C$18.84. Copper prices have slumped 13 percent this year, the most among six metals traded on the London Metal Exchange.

U.S. jobless claims unexpectedly fell last week to 315,000, the lowest since the end of November, and retail sales rose for the first time in three months in February. Gold for April delivery rose 0.1 percent to $1,372.40 an ounce in New York, a six-month high, erasing earlier losses.

Through yesterday, gold had risen 14 percent this year as investors sought a haven amid signs of weakening U.S. growth and rising tension between Russia and Ukraine.

U.S. Secretary of State John Kerry warned of “very serious” steps from Europe and the U.S. if there is no sign of resolution between the two countries ahead of a vote this weekend in the Crimea region on a separatist resolution.

Alacer Gold Corp. jumped 10 percent to C$3.50 and Detour Gold Corp. rallied 12 percent to C$11.92, highest since August. Nine of 10 industries in the benchmark Canadian equity gauge declined on trading volume 12 percent higher compared with the 30-day average.

Transat AT, the airline and travel agency retailer, plunged 17 percent to C$9.10 for the biggest decline in three years. The company reported a loss of 60 Canadian cents a share in the first quarter, compared with analysts’ projections of a smaller 45-cent loss, and blamed the declining Canadian dollar. The falling loonie, which is down 3.9 percent versus the dollar this year, resulted in a C$14 million increase in operating expenses, the company said.

Empire Grocery

Empire, which operates the Sobeys grocery store chain, declined 3 percent to C$68.10. The company reported adjusted earnings of 84 Canadian cents a share in the third quarter, short of estimates for C$1.23. Same-store sales for its Sobeys chain declined 0.2 percent in the quarter.

Bombardier added 2.7 percent to C$3.88 after Walter Spracklin, analyst at RBC Capital Markets, raised his rating for the stock to outperform, the equivalent of a buy.

As a result of progress in Bombardier’s long-delayed CSeries testing program, liquidity risks have abated and the company is in position for improving sales heading into the Farnborough, U.K., airshow in July, Spracklin said.

“The near-term risk to reward on Bombardier shares is once again compelling,” Spracklin said in a note to clients.

BlackBerry, the struggling smartphone maker, fell 2.7 percent to C$9.99 for a seventh day of losses, the longest streak since November 2011. The stock has slumped 13 percent in seven days.

To contact the reporter on this story: Eric Lam in Toronto at elam87@bloomberg.net

To contact the editors responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net Michael P. Regan

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