Canada Stocks Fall as Slump in Gold Shares Offsets Energy Rally

Canadian stocks fell, after closing at a 19-month high yesterday, as a drop in gold producers and banks offset a rally in energy shares fueled by higher oil prices and crude exports.

Banro Corp. plunged 22 percent after its chief executive officer stepped down. Barrick Gold Corp. and Goldcorp Inc. dropped at least 2.2 percent. Canadian Western Bank slid 4.8 percent as first-quarter earnings missed analysts’ expectations. Suncor Energy Inc., Canada’s largest oil producer, and Cenovus Energy Inc. rose at least 0.5 percent after oil gained the most in three weeks.

The Standard & Poor’s/TSX Composite Index fell 5.44 points, or less than 0.1 percent, to 12,826.52 at 4 p.m. in Toronto. The benchmark index fluctuated between gains and losses before closing lower to break a two-day winning streak. Trading volume was 3.6 percent below the 30-day average. The S&P/TSX has risen 3.2 percent this year.

“The market is playing a bit of a waiting game given the strength it’s added the last little while, breaking some key levels, with the Dow hitting an all-time high,” said Brian Huen, managing partner at Toronto-based Red Sky Capital Management Ltd., which oversees C$225 million ($218 million) in assets. “So where do we go from here? The market is waiting for the next catalyst.”

Raw-materials stocks contributed most to losses in the S&P/TSX, falling 0.8 percent as a group. An index of gold producers tumbled 1.6 percent.

Banro, Barrick

Banro slumped 49 Canadian cents to C$1.78, its biggest decline in more than four years, after the gold miner active in the Democratic Republic of Congo said Chief Executive Officer Simon Village had left his position. The company did not give a reason for the departure.

Barrick, the world’s largest gold miner, dropped 2.3 percent to C$29.90. Goldcorp slid 2.2 percent to C$33.68.

Canadian Western plunged the most since July 2009, losing C$1.46 to C$28.91, after the lender reported adjusted earnings of 58 Canadian cents a share. That missed by 2 cents the average estimate of 12 analysts surveyed by Bloomberg.

Canada’s trade deficit in January narrowed to C$237 million, its lowest level in almost a year, on higher exports of crude and bitumen, Statistics Canada said. Economists surveyed by Bloomberg forecast the deficit would be C$600 million, based on the median of 20 estimates.

Oil, Gas

“The situation in Venezuela has created some uncertainty, so we may see a pickup of Canadian heavy crude exports to the U.S.,” Huen said, referring to the death of Venezuelan President Hugo Chavez, on March 5.

Suncor increased 17 Canadian cents to C$31.45, and Cenovus added 1.3 percent to C$32.40. The price of crude for April delivery rallied 1.3 percent to settle at $91.56 a barrel, after U.S. unemployment benefit applications dropped to a six-week low.

Encana Corp., Canada’s largest natural gas producer, climbed 4 percent to C$19.61. Natural gas for April delivery surged 3.2 percent to settle at a 13-week high after a government report showed U.S. inventories fell by more than forecast last week.

Canadian Natural Resources Ltd. advanced 3 percent, or 94 Canadian cents, to C$32.10. The oil and gas producer raised its quarterly dividend 19 percent to 12.5 Canadian cents a share. It also reported fourth-quarter net income of C$352 million, down 58 percent from C$832 million a year ago.

The company said today it plans to either sell or bring in a partner for some of its Montney liquefied natural gas holdings in British Columbia. Several companies, including Exxon Mobil Corp., are exploring LNG terminals in British Columbia to export gas from the Montney shale base.

Petrominerales Tumbles

Petrominerales Ltd. plunged 9.1 percent, extending losses to a sixth day after reporting fourth-quarter earnings that fell short of estimates. The Calgary-based company, which is exploring for oil and gas in Colombia and Peru, tumbled 67 Canadian cents to C$6.72, its lowest level since January 2009.

Rogers Communication Inc., Canada’s biggest wireless carrier, slid 1.3 percent to C$48.98, after the government said it will limit the amount of wireless spectrum Canada’s largest telecommunications providers can buy. Telus Corp. declined 1.5 percent to C$69.70.

Canada’s major wireless operators will each be able to buy only one of four blocks of spectrum considered by the industry to be the most desirable, Christian Paradis, the federal Industry Minister, said in a statement today. The government expects the auction, set to begin Nov. 19, will raise C$897 million.

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