Canadian stocks fell from a three-week high as oil producers retreated after a U.S. Energy Department official said the U.S. may release crude from the Strategic Petroleum Reserve.
Nexen Inc., an energy producer with operations on five continents, fell 2.6 percent. Kinross Gold Corp., Canada’s fourth-biggest gold producer by market value, declined 2.6 percent. First Quantum Resources Ltd., the country’s second-largest publicly traded copper producer, fell 1.9 percent. Centerra Gold Inc. plunged 15 percent after cutting its output forecast.
The Standard & Poor’s/TSX Composite Index decreased 62.75 points, or 0.5 percent, to 12,512.04 in Toronto.
“The financials have shown some improvement, but we counter that against weakness we continue to see in oil and gas,” Andrew Pyle, an associate money manager on a Bank of Nova Scotia team that oversees about C$200 million ($200 million), said in a phone interview. “For the last couple of weeks we’ve been seeing decent movements in the price of oil without really a commensurate improvement in the oil and gas sector.”
The index slipped 0.3 percent last week as manufacturing contracted in China and Europe and gold fell to a 10-week low before rebounding on March 23. Energy and raw-materials companies make up 45 percent of Canadian stocks by market value, according to Bloomberg data.
Energy stocks in the S&P/TSX fell, driven by oil shares, after Charles McConnell, the acting assistant secretary for fossil energy, said a release from the reserve is “being considered.”
Nexen Inc. fell 2.6 percent to C$18.08. Pacific Rubiales Energy Corp., which explores for oil in Colombia, decreased 2.4 percent to C$28.44.
Canadian materials companies fell after two days of increases on concern that an index of property values that showed the drop in U.S. house prices is slowing may undermine the case for more Federal Reserve economic stimulus.
Kinross Gold Corp., Canada’s third-biggest gold producer by market value, declined 2.6 percent to C$9.84. Centerra Gold plummeted 15 percent to C$13.70 after cutting production forecasts at its flagship Kyrgyz mine by a third because of access delays caused by ice movement.
First Quantum fell 1.9 percent to C$18.84. Inmet Mining Corp., which produces copper, gold and zinc, dropped 2.7 percent to C$55.88.
The S&P/TSX has declined 1 percent in March after gaining 4.2 percent in January and rising 1.5 percent in February.
“This has not been an impressive month for the TSX,” said Pyle. “We’re not seeing the same improvement we saw in January and February.”