Canadian stocks fell, following the biggest rally in 11 months, as raw-materials companies declined amid signs China may tolerate slower growth and a U.S. Federal Reserve official urged slower stimulus.
Pretium Resources Inc. lost 4 percent and Alamos Gold Inc. dropped 3.7 percent as falling metals prices weighed on raw-materials producers. Catamaran Corp. added 0.9 percent, pacing gains among health-care companies. Niko Resources Ltd. surged 3.4 percent after entering an agreement for a $60 million loan.
The Standard & Poor’s/TSX Composite Index fell 31.09 points, or 0.3 percent, to 12,462.17 at 4 p.m. in Toronto, erasing an earlier gain of 0.2 percent. The loss pared the index’s weekly gain to 2.7 percent, its biggest five-day advance since November. Trading was 27 percent below the 30-day average.
“It has been a zigzag worth of news coming out from the Fed,” said Irwin Michael, fund manager with ABC Funds in Toronto. He helps manage about C$800 million ($759 million). “The market is moving on how people are processing the information coming out.”
The benchmark gauge jumped the most since August 2012 yesterday, erasing a loss for the year, after Fed Chairman Ben S. Bernanke backed sustained monetary stimulus for the economy of Canada’s biggest trading partner. Stocks slumped today after Philadelphia Fed Bank President Charles Plosser said the central bank should begin tapering its $85 billion in monthly bond buying in September and end the stimulus by year-end.
China’s Finance Minister, Lou Jiwei, speaking yesterday at the U.S.-China Strategic and Economic Dialogue in Washington, said he remains confident of achieving a 7 percent growth rate this year. That’s lower than the government’s target for 2013 of 7.5 percent. A report due on July 15 may show economic growth slowed for a second quarter in the three months ended March 31. China, the world’s biggest consumer of industrial metals and energy, is Canada’s second-largest trading partner.
Six of the gauge’s ten groups declined. Raw-materials producers lost the most, falling 1.7 percent, as prices for metals from silver to copper dropped.
Pretium Resources, a diversified miner, slid 4 percent to C$7.52. Alamos Gold tumbled 3.7 percent to C$13.41 after agreeing to buy precious metals producer Esperanza Resources Corp. for about C$69.4 million.
Health-care companies gained the most, as Catamaran Corp. added 0.9 percent to C$51.16.
Railroad companies drove industrial stocks up 0.5 percent after BMO analyst Fadi Chamoun wrote in a note that railroads’ market share in heavy crude oil shipments will “materially increase” over the next two years.
Canadian National Railway Co. added 0.9 percent to C$104.93 and Canadian Pacific Railway Ltd. rose 1.7 percent to C$131.73.
Niko Resources surged 3.4 percent to $8.64 after the company entered an agreement for a $60 million loan that will be funded by a group of institutional investors. Net proceeds from the loan will be used to fund working capital requirements.