Canadian stocks fell for a second day after European Central Bank President Jean-Claude Trichet suggested interest rates may increase further and a new earthquake hit Japan.
Bank of Montreal lost 1 percent after the ECB boosted its benchmark interest rate by 0.25 percentage point. Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, decreased 1.6 percent after a Mosaic Co. executive said shareholders may sell as much as 35 percent of Mosaic’s stock. MKS Inc., which makes software for computer programmers, soared 37 percent after agreeing to a takeover offer.
The Standard & Poor’s/TSX Composite Index slipped 94.88 points, or 0.7 percent, to 14,107.77.
“The third-largest economy in the world just had a 7.1 earthquake,” said Keith McLean, who oversees C$150 million ($156 million) as a money manager at GMP Investment Management in Toronto. “If this is indicative there could be more geological instability, it could lead to more problems.”
The index had rallied 4.8 percent from March 15 to yesterday as gold and copper futures surged at least 4.7 percent as the U.S. dollar dropped against 14 of 16 other major currencies. The greenback had declined on speculation the U.S. Federal Reserve will raise interest rates more slowly than other central banks.
The European Central Bank boosted its benchmark interest rate to 1.25 percent from 1 percent today in a move forecast by all 57 economists in a Bloomberg survey. In a press conference, Trichet said inflation risks remain and the bank will “always do what is necessary to deliver price stability over the medium term.”
Stocks extended their losses after the earthquake struck Japan. The U.S. Geological Survey measured today’s tremor as magnitude 7.1, the strongest since the devastating magnitude-9 temblor of March 11.
The S&P/TSX Financials Index fell for a third day. Canadian Imperial Bank of Commerce, Canada’s fifth-largest lender by assets, declined 1 percent to C$83.92. Bank of Montreal, the country’s No. 4 bank, lost 1 percent to C$62.70. Toronto-Dominion Bank, the second-biggest lender, decreased 1.1 percent to C$84.50.
Fertilizer producers retreated after Mosaic Chief Financial Officer Larry Stranghoener said as many as 157 million shares might be sold in a secondary offering next month as part of Cargill Inc.’s plan to sell its controlling stake.
Potash Corp. fell 1.6 percent to C$56.55. Agrium Inc., Canada’s second-largest fertilizer producer, dropped 1 percent to C$88.54.
Gold stocks declined for the first time in four days as the commodity fluctuated. Barrick Gold Corp., the world’s largest gold producer, lost 1 percent to C$51.50. Eldorado Gold Corp., which mines in China and Turkey, decreased 1.3 percent to C$16.48. Agnico-Eagle Mines Ltd., Canada’s fifth-largest gold producer, slipped 1.2 percent to C$62.80.
An index of base-metals and coal producers retreated the most in eight days. Teck Resources Ltd., Canada’s largest company in the industry, retreated 2 percent to C$55.06. SouthGobi Resources Ltd., which mines coal in Mongolia, fell 2.9 percent to C$13.92.
First Quantum Minerals Ltd., Canada’s second-largest publicly traded copper producer, dropped for the first time in eight days, slumping 4.9 percent to C$135.09. The shares had risen to their highest price relative to earnings since 2009.
MKS, Canadian Natural
MKS surged 37 percent to C$26.01, the highest level since August 2000, after Parametric Technology Corp. agreed to buy the Waterloo, Ontario-based company for C$26.20 a share in cash. The shares’ rally was their biggest one-day advance ever.
Canadian Natural Resources Ltd., Canada’s second-largest energy company by market value, declined 1.8 percent to C$46.40. In a letter dated yesterday, U.S. Sen. Ron Wyden asked the Federal Trade Commission to investigate the pricing policies of Canadian oil shippers including Canadian Natural.
Brookfield Asset Management Inc., the country’s biggest real estate company, lost 2.9 percent to C$30.70. The shares have slumped 3.6 percent since April 4, when Bloomberg News reported that Brookfield is among companies that have expressed interest in buying properties from Charter Hall Office REIT.
Bankers Petroleum Ltd., which produces oil and gas in Albania, jumped 5.5 percent to C$8.82 after releasing an operations update. The company is producing more fuel than David Dudlyke, an analyst at Stifel Financial Corp., had forecast, Dudlyke wrote in a note to clients.