Canadian stocks fell for a second day as energy companies dropped after the International Monetary Fund said the world economy remains at risk for a slowdown.
Suncor Energy Inc., Canada’s biggest oil and gas producer, decreased 2.2 percent as crude futures retreated for the first time in eight days. Petrominerales Ltd., which produces energy in Colombia, plunged 20 percent after reporting drilling results that Tudor Pickering Holt & Co. called “disappointing.” Valeant Pharmaceuticals International Inc., Canada’s biggest drugmaker, rose 5.6 percent after reporting profit that surpassed the average analyst estimate in a Bloomberg survey.
The S&P/TSX Composite Index fell 25.39 points, or 0.2 percent, to 12,700.38 after IMF Managing Director Christine Lagarde said the economy is “not out of the danger zone.”
“There is a bit of deja vu,” Ian Nakamoto, director of research at money manager MacDougall MacDougall & MacTier Inc., said in a telephone interview from Toronto. The firm oversees about $4 billion. “We had a very strong market at the beginning of the year last year, and we also had a rise in oil prices. The equity markets fell back. The general sense is that there is going to be a pause. That’s why people are taking money off the table.”
The index rallied 2.2 percent last week as Greek and European officials agreed on a second bailout of the country and oil futures climbed to the highest price since May. Canada’s benchmark stock gauge has advanced 6.2 percent this year after sinking 11 percent in 2011.
Lagarde cited “still fragile financial systems, high public and private debt, and higher world oil prices” as risks to the economy in a statement yesterday.
Oil futures dropped 1.1 percent on the New York Mercantile Exchange after jumping 11 percent in the previous two weeks.
Suncor declined 2.2 percent to C$36.16. Canadian Natural Resources Ltd., the country’s second-largest energy company by market value, lost 0.8 percent to C$37.71. Nexen Inc., an oil and gas producer with operations on five continents, slumped 2.9 percent to C$20.56 after John Herrlin, an analyst at Societe Generale SA, said the company is no longer a short-term buy.
Petrominerales tumbled a record 20 percent to C$19.05 after Matthew Portillo, an analyst at Tudor Pickering, cut his rating on the shares to accumulate from buy. Portillo said flow rates at the company’s Tatama-1 well were at most one-third of what he had forecast. An accumulate rating means the shares should be purchased “consistently” at current prices rather than “aggressively” as with a buy rating.
Pan Orient Energy Corp., which operates in Thailand, Indonesia and western Canada, soared 25 percent to C$4.24 after reporting drilling results. The shares have more than doubled this year.
The S&P/TSX Materials Index fell for a second day as the U.S. Dollar Index rebounded after closing at the lowest level since Dec. 1 on Feb. 24.
Iamgold Corp., which mines in West Africa, South America and Quebec, dropped 2.5 percent to C$15.50 after Tony Lesiak, an analyst at Macquarie Group Ltd., cut his rating on the shares to neutral from outperform. A neutral rating means the shares will return within 5 percentage points of their benchmark over the next 12 months. Teck Resources Ltd., Canada’s biggest base-metals and coal producer, declined 0.8 percent to C$40.34.
Guyana Goldfields Inc., which explores for gold in South America, sank 13 percent to C$5.87, the lowest since November 2009, after analysts at Royal Bank, Bank of Montreal and Cormark Securities Inc. cut their ratings on the company. The shares plunged 20 percent Feb. 24 after the feasibility study for its Aurora project was “not as robust as previous guidance had suggested,” Brad Humphrey, an analyst at Raymond James Financial Inc., said in a note to clients.
Trelawney Mining & Exploration Inc., a gold explorer with operations in Ontario, slumped 16 percent, the most since September 2009, to C$2.49. The company released a new resource estimate for its Cote Lake deposit that had a lower average grade than its previous report. Jeff Killeen, an analyst at Canadian Imperial Bank of Commerce, reduced his 12- to 18-month share-price forecast to C$4.25 from C$6.50.
Batero Gold Corp., which explores in Colombia, plunged 49 percent, the most since it began trading three years ago, to C$1.30. The initial resource estimate for the Batero-Quinchia project was lower than Jeff Wright, an analyst at Global Hunter Securities LLC, had forecast, Wright said in a telephone interview.
Valeant gained 5.6 percent to C$50.71 after its fourth-quarter earnings beat the average analyst estimate in a Bloomberg survey by 7.8 percent, excluding certain items. The shares have surged 10 percent in the last four days.
Money manager Fiera Sceptre Inc. soared 18 percent, the most since June 2010, to C$8.50 after agreeing to buy National Bank of Canada’s asset-management unit for C$309.5 million ($308.4 million).