Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Canadian Stocks Drop on Concerns of Slowing Gold Demand

Canadian stocks fell for the second time in three days, led by gold companies, on speculation that an economic recovery will curb demand for the metal as an alternative investment.

Guyana Goldfields Inc., which explores for gold in South America, decreased 9.4 percent. China Gold International Resources Corp. fell 4.9 percent. Manulife Financial Corp., North America’s third-largest insurer, advanced 6.6 percent a day after the U.S. Federal Reserve raised its assessment of the economy and refrained from new actions to lower borrowing costs.

The S&P/TSX Composite Index declined 159.79 points, or 1.3 percent, to 12,377.90.

“With the Fed statements yesterday and the data coming out of the U.S., the market is getting a lot better,” Greg Taylor, a money manager at Aurion Capital Management in Toronto, said in a telephone interview. The firm oversees about C$5.5 billion ($5.6 billion). “With that happening, people don’t need their insurance policy, which has been gold. It looks like it has no support until C$1,600, and that’s just dragging these gold companies lower.”

The index has increased 0.6 percent since March 6, the day of its largest decline of the year, as stronger-than-forecast American jobs data and Greece’s debt restructuring helped offset concern over China’s lower growth target and Europe’s economic contraction. Energy and raw-materials companies make up 46 percent of Canadian stocks by market value, according to Bloomberg data.

Gold’s Retreat

Gold tumbled on speculation that the Federal Reserve will refrain from offering additional stimulus as the economy recovers. Futures for April delivery retreated 3 percent to $1,646.90 an ounce at 1:41 p.m. in New York, the biggest loss since Feb. 29.

Guyana Goldfields fell 9.4 percent to C$4.04, while China Gold dropped 4.9 percent to C$4.23. Nevsun Resources Ltd., which mines the metal in the African country of Eritrea, decreased 6.5 percent to C$3.46. Eight out of the 10 biggest stock declines in the S&P/TSX were gold companies.

Financial stocks in the S&P/TSX, led by insurers, rose for a fifth straight day after the Fed yesterday said 15 of 19 U.S. banks would be able to maintain capital levels above a regulatory minimum in an “extremely adverse” economic scenario. Treasuries slid, sending 10- and 30-year yields to a four-mouth high.

Manulife surged 6.6 percent to C$13.49 after rising 11 percent, the most intraday since November 2010. Industrial Alliance Insurance and Financial Services Inc. gained 11 percent to C$31.05 on the increased yields, the biggest increase in the S&P/TSX. Sun Life Financial Inc. rose 4.5 percent to C$22.61.

“The move can be traced to the increased in the 10-year bond yield, which is good for life companies,” Taylor said. “That’s why Manulife is having a strong move today.”

GMP Capital Inc. fell 7.9 percent to C$7.20 after reporting fourth-quarter earnings per share excluding some items of 5 Canadian cents, missing the average analyst estimate of 9 Canadian cents.

Energy stocks in the S&P/TSX slipped with oil prices after inventories climbed to a six-month high.

Suncor Energy Inc., Canada’s largest oil and gas producer, dropped 3.8 percent to C$32.75. TransCanada Corp., the developer of the proposed Keystone XL pipeline, lost 1.6 percent to C$43.82.

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.