Jan. 21 (Bloomberg) -- Canadian stocks fell, capping a weekly decline, as gold and silver mining companies fell amid signals of growing confidence in a European economic recovery.
Nevsun Resources Ltd., which mines for gold in Ghana and Mali, dropped 7.9 percent to C$5.72, the biggest decline among producers of the metal. Eldorado Gold Corp. fell 3.2 percent, while Gammon Gold Inc. dropped 4 percent. Enbridge Inc. rose 0.8 percent after China Petroleum & Chemical Corp. joined a group investing more than $100 million in the Calgary-based company’s proposed $5.5 billion pipeline to Canada’s west coast.
The Standard & Poor’s/TSX Composite Index fell 0.6 percent to 13,258.57 in Toronto after climbing. The Canadian stock benchmark fell 1.5 percent this week on the prospect that faster-than-forecast growth in China will prompt the country to raise interest rates, crimping demand for commodities. Gold and precious metals lost allure as an alternative investment today as concerns over the debt crisis in Europe eased.
“Things have gotten much calmer in Europe, and as a result some money is coming back out of gold,” said Doug Davis, vice chairman of Toronto money manager Davis-Rea Ltd., which manages C$400 million ($401 million).
The Munich-based Ifo institute said its business climate index increased to 110.3 from 109.8 in December, the highest level since records for a reunified Germany began in 1991. China said its gross domestic product grew 9.8 percent in the fourth quarter, sending stocks lower from Asia to Europe yesterday on concern Chinese policy makers will raise interest rates and stem the expansion.
Gold futures dropped 0.4 percent to settle at $1,341 an ounce in New York, while silver also fell. Eldorado Gold, which has mines in Brazil, China, Turkey and Greece, fell 3.2 percent to C$15.85. Gammon, which explores in Mexico, declined 4 percent to C$7.22.
Enbridge rose 0.8 percent to C$55.55. The largest transporter of oil to the U.S. from Canada’s tar sands has proposed piping as much as 525,000 barrels a day to the nation’s west coast, from where it would be shipped to Asia and the U.S.
Suncor Energy Inc., Canada’s largest oil and gas producer, gained 1 percent to C$38.06. Cenovus Energy Inc., Canada’s fifth-biggest energy company, climbed 1.7 percent to C$32.14, the first gain in a week. Pason Systems Inc., a provider of oilfield-instrumentation systems, rose 6.8 percent to C$13.86, the second-biggest gain in the S&P/TSX Index.
“That report that came out of China of its growth being greater than people had anticipated is positive for energy even though people got worried that the Chinese might slow growth down,” Davis said.
Nordion Inc. climbed 9.4 percent to C$11.06 for the biggest gain in the index. The producer of medical isotopes said it will pay an annual dividend of 40 Canadian cents a share.
To contact the reporter on this story: Jennifer A. Johnson in New York at Jjohnson156@bloomberg.net
To contact the editor responsible for this story: Nick Baker at email@example.com.