Canadian stocks fell as crude prices plunged the most in eight weeks and euro area finance ministers quarreled over the future of the banking system and the parameters of future bailouts.
Pacific Rubiales Energy Corp. and BlackPearl Resources Inc. fell at least 4.9 percent as energy stocks contributed the most to declines in the benchmark index. Rona Inc. plunged 12 percent after U.S.-based Lowe’s Cos. withdrew its unsolicited C$14.50 ($14.91) a share offer for the Quebec-based home improvement retailer. Teck Resources Ltd. declined 3.8 percent after analysts at Canaccord Genuity cut the stock to a hold.
The Standard & Poor’s/TSX Composite Index fell 52.61 points, or 0.4 percent, to 12,446.86 in Toronto. The equity gauge has advanced 4.1 percent this year, rallying in September as commodities rebounded on stimulus moves from the U.S. Federal Reserve and signs of progress in the euro zone.
Eight of 10 industries on the S&P/TSX retreated, with volume for the day 19 percent above the 30-day average.
“It’s been a tremendously comforting rally that we haven’t seen in a long time, so you were bound to have a bit of a correction,” said Michael Smedley, executive vice president with Morgan Meighen & Associates Ltd. in Toronto. His firm manages about C$1 billion ($1.03 billion).
Oil declined more than $3 in less than a minute in late trading as October options were about to expire, ending the day with the largest drop in eight weeks.
Futures tumbled to $94.83 at 1:54 p.m. from $97.88 in the same minute on a surge in volume. Oil for October delivery settled 2.4 percent lower at $96.62 a barrel in New York.
Global stocks fell earlier after squabbling among European governments over the next steps needed to overcome the sovereign debt crisis. A Sept. 14 European Union finance ministers meeting in Cyprus deadlocked over the timetable for a more unified EU banking sector, with a German-led coalition pushing back against a more ambitious plan sought by France, Spain and Italy. The ministers also bickered over the terms of bailout requests and the role of the European Central Bank.
Teck Resources, Canada’s largest diversified miner, slumped 3.8 percent to C$31.78 after Orest Wowkodaw, an analyst with Canaccord Genuity, cut his rating to hold from buy and lowered his one-year price target to C$37 from C$39.
Paul Forward, analyst with Stifel Nicolaus & Co. Inc., said Australian metallurgical coal producers settled their fourth-quarter contract pricing at $170 a ton, compared with a benchmark level of $225 a ton in the third quarter. In 2011, coal accounted for 49 percent of Teck’s revenues.
Pacific Rubiales, which operates in Colombia, fell 5.4 percent to C$24.41 after a government authority said the country will decide on environmental licenses requested by the company by the end of the year. BlackPearl Resources declined 4.9 percent to C$3.71.
San Gold Corp., the third-worst performing stock on the S&P/TSX Materials Index this year, decreased 3.7 percent to C$1.04. Kirkland Lake Gold Inc. dropped 4.1 percent to C$11.38 and Franco-Nevada Corp., a gold royalties company, fell 2.2 percent to C$56.08. Gold for December delivery fell 0.1 percent to $1,770.60 an ounce in New York.
First Quantum Minerals slipped 4.7 percent to C$22.03. Copper futures for December delivery declined 1.1 percent to settle at $3.792 a pound in New York amid speculation the Chinese government will not ease monetary policy as quickly as anticipated.
Rona fell 12 percent to C$11.29, its biggest loss ever. Lowe’s withdrew its offer after the Rona board rebuffed its request for permission to conduct due diligence and proceed with a friendly transaction, the Mooresville, North Carolina-based retailer said today in a statement.
Jean Coutu Group Inc., a Longueuil, Quebec-based pharmacy retailer, dropped 0.7 percent to C$14.17. Alimentation Couche-Tard Inc., based in Laval, Quebec, slipped 1.3 percent to C$45.61.