May 24 (Bloomberg) -- Canadian stocks were little changed as commodity companies rallied and banks pared losses in the final 40 minutes of trading, erasing a 0.6 percent decline in the S&P/TSX Composite Index.
Equities rebounded after Italian Prime Minister Mario Monti said Greece is likely to stay in the euro and that a majority of the region’s leaders support issuing a joint bond to fight the debt crisis. Gold producers posted their longest winning streak since July. Research In Motion Ltd. slumped 3.4 percent to the lowest level since December 2003 after Patrick Spence resigned as head of global sales. Royal Bank of Canada and Bank of Montreal fell at least 1.8 percent.
The S&P/TSX Composite Index increased 1.27 points, or less than 0.1 percent, to 11,566.07. It ranged between a loss of 0.8 percent and a gain of 0.5 percent.
“The market is taking a little bit of a breather,” Sadiq Adatia, chief investment officer at Sun Life Global Investments in Toronto, said in a telephone interview. The unit of Sun Life Financial Inc. oversees about C$4.7 billion ($4.6 billion) for clients. “The market isn’t way ahead of itself because people still aren’t very confident, but there are some cheap valuations out there.”
The market had declined earlier after three bank officials with knowledge of the matter said China’s biggest banks may fall short of loan targets for the first time in at least seven years as an economic slowdown reduces demand for credit.
China is the world’s biggest consumer of metals and energy. According to data provided by Statistics Canada, it received 4.2 percent of Canada’s total exports in March. Canada recorded C$16.8 billion of exports to China in 2011. Commodities companies make up 43 percent of the S&P/TSX’s value, according to data compiled by Bloomberg.
China’s economy may grow in 2012 at its slowest pace in 13 years, a Bloomberg News survey showed last week, as Europe’s debt crisis curbs exports, manufacturing shrinks and demand for new homes wanes.
Materials shares in the benchmark gauge rose a third consecutive day. Gold rose the most in a week as central banks increased their holdings. Central banks, the world’s biggest holders of gold, continued to buy bullion in April as Turkey raised its reserves by 29.7 metric tons and Ukraine, Mexico and Kazakhstan boosted their holdings, International Monetary Fund data show.
Eldorado Gold Corp., a Vancouver-based mining company, climbed 2.4 percent to C$11.96. Kinross Gold Corp., Canada’s fourth-largest producer of the precious metal, gained 2 percent to C$8.65. Agnico-Eagle Mines, a gold producer that operates in Canada, Mexico and Finland, increased 1.2 percent to C$40.67.
Banks in the S&P/TSX fell for the first time in three days amid the news of a potential Chinese economic slowdown. Royal Bank of Canada, the nation’s biggest lender, slipped 2.9 percent to C$51.38. Bank of Montreal, Canada’s fourth-biggest lender by assets, declined 1.8 percent to C$55.08.
RIM slumped 3.4 percent to C$10.98, its lowest closing price since December 2003, after Spence resigned as head of global sales to take a job in a different industry following 14 years at the company. The company, which three years ago made up 3.8 percent of the S&P/TSX’s value, now represents 0.4 percent.
“RIM is becoming a forgotten story now,” Adatia said. “When news comes out it doesn’t really impact the market because nobody’s following it much anymore. Unless it starts to have some exceptional results or you see some takeover talk, you’re not going to see it affect the market.”
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