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Canada Stocks Drop as Mining Shares Slip With Euro; Yamana Falls

March 2 (Bloomberg) -- Canadian stocks fell, completing a weekly retreat, as mining stocks dropped with the euro after Germany reported a decline in retail sales and oil futures slipped as Saudi Arabia denied speculation of pipeline sabotage.

Yamana Gold Inc., Canada’s third-largest gold producer by market value, lost 2.6 percent as the metal posted its biggest weekly slump since December. Canadian Natural Resources Ltd., the country’s second-biggest energy producer by value, slipped 2.9 percent as crude oil finished its first weekly drop in four weeks. Royal Bank of Canada, the country’s largest lender by assets, decreased 0.7 percent after an analyst at Toronto-Dominion Bank cut his rating on the shares.

The S&P/TSX Composite Index fell 79.64 points, or 0.6 percent, to 12,643.82, extending its weekly loss to 0.6 percent.

“The markets are showing a little bit of overbought conditions,” Philip Petursson, managing director of the Portfolio Advisory Group at Manulife Financial Corp.’s asset-management unit, said in a telephone interview from Toronto. The unit oversees about $217 billion. “The economic data that helped drive the markets higher has been fully digested in the marketplace.”

The index gained 6.4 percent this year through yesterday as gold, copper and oil futures each advanced at least 9.9 percent. Energy and raw-materials make up 48 percent of Canadian stocks by market value, according to Bloomberg data.

The U.S. dollar completed its biggest weekly climb against the euro since Jan. 6 after Germany reported that retail sales declined 1.6 percent in January. None of the 22 economists in a Bloomberg survey had forecast a drop that large.

Yamana, Teck

Gold, silver and copper retreated on the Comex in New York.

Yamana lost 2.6 percent to C$16.82. Teck Resources Ltd., Canada’s largest base-metals and coal producer, decreased 2.6 percent to C$38.52. New Gold Inc., which mines in Mexico, Australia and the U.S., slumped 5.2 percent to C$10.76 after the average fourth-quarter earnings estimate of analysts in a Bloomberg survey.

Oil dropped the most this year after Saudi Arabia’s oil ministry said there has been no sabotage of its oil facilities in the Qatif area. Iran’s Press TV said yesterday that an explosion had hit oil pipelines in eastern Saudi Arabia. Oil continued its retreat after The Atlantic magazine quoted U.S. President Barack Obama as saying a pre-emptive strike on Iran might allow the country to “portray itself as a victim.”

Canadian Natural lost 2.9 percent to C$36.33. Suncor Energy Inc., the country’s biggest energy company, declined 1.1 percent to C$35.45. Calfrac Well Services Ltd. slid 7.6 percent to C$32.48 after surging 26 percent in the previous three days.

Progress Energy

Progress Energy Resources Corp., which produces natural gas and oil in Canada, rallied 6.7 percent to C$11.50 after Roger Serin, an analyst at TD, raised his rating on the shares to buy from hold. The company reported fourth-quarter cash flow per share 20 percent higher than Serin’s estimate.

Trinidad Drilling Ltd., an oil and gas services company, surged 5.4 percent to C$8 after Michael Mazar, an analyst at Bank of Montreal, said in a note to clients that the company has a “moderate-to-high” chance of raising its dividend when it reports quarterly financial results next week.

Royal Bank decreased 0.7 percent to C$56.40 to end its eight-day streak of gains, the longest in two years. Jason Bilodeau, an analyst at TD, reduced his rating on the stock to hold from buy. “Much of the opportunity for near-term outsized returns has been captured” after the shares soared 31 percent from Nov. 25 to yesterday, Bilodeau wrote in a note to clients.

SNC-Lavalin Group Inc., Canada’s biggest construction and engineering company, climbed 2.9 percent to C$40 after Gareth Tingling, an analyst at Macquarie Group Ltd., raised his rating on the shares to outperform from neutral. An outperform rating means the shares will return at least 5 percentage points more than their benchmark over the next year. SNC-Lavalin’s 21 percent plunge after disclosing an internal accounting probe was overdone, Tingling wrote in a note to clients.

To contact the reporter on this story: Matt Walcoff in Toronto at

To contact the editor responsible for this story: Nick Baker at

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