Canadian stocks fell the most in almost six months after crude and gold slumped and Encana Corp.’s forecasts for next year disappointed investors.
Encana slid 5.6 percent after the company’s target for oil and liquids production was less than projected, Canaccord Genuity Corp. said. B2Gold Corp. and Iamgold Corp. declined at least 6 percent as gold fell after congressional negotiators reached a U.S. budget agreement. Hudson’s Bay Co. sank 5.7 percent as earnings fell short of forecasts. Laurentian Bank of Canada slumped 4.6 percent after reporting quarterly earnings that missed analyst estimates.
The Standard & Poor’s/TSX Composite Index fell 190.59 points, or 1.4 percent, to 13,133.42 at 4 p.m. in Toronto, the biggest loss since June 20. The benchmark equity gauge has risen 5.6 percent this year, the fourth-worst performer among developed markets ahead of Austria, Hong Kong and Singapore.
“Oil’s had a couple of good days and people are looking for an excuse to take a bit of money off the table,” said Michael O’Brien, a fund manager with TD Asset Management Inc. in Toronto. The firm manages C$218.3 billion ($205.7 billion). “People are beginning to tighten things down in advance of what could be an early taper announcement.”
American lawmakers announced a budget deal yesterday that would ease automatic spending cuts over the next two years, remove the risk of a government shutdown and cut the deficit by $23 billion.
The Federal Open Market Committee may begin reducing stimulus at its Dec. 17-18 meeting, according to 34 percent of economists surveyed Dec. 6 by Bloomberg, an increase from 17 percent in a Nov. 8 survey.
Legacy Oil & Gas Inc. dropped 1 percent to C$6.04 and Penn West Petroleum Ltd. retreated 3.2 percent to C$9.09 as crude fell from a six-week high. The Energy Information Administration said stockpiles of the two fuels each jumped about three times as much as analysts in a Bloomberg survey has estimated. Oil for January delivery slipped 1.1 percent to settle at $97.44 a barrel.
Energy producers declined 1.4 percent as a group as all 10 industries in the S&P/TSX retreated.
Encana declined 5.6 percent to C$19.17. The natural gas producer gave forecasts for production, including 70,000 to 75,000 barrels of oil and liquids a day in 2014. That’s about 12 percent lower than projections, said Phil Skolnick, an analyst with Canaccord Genuity, in a note to clients.
Bank of Montreal analyst Randy Ollenberger said in a research report that Encana’s estimate for liquids production was less than his forecast.
Hudson’s Bay tumbled 5.7 percent to C$18.80. The operator of department stores reported adjusted earnings of 7 Canadian cents a share in the third quarter, less than the average analyst forecast of 10 cents from a Bloomberg survey.
Laurentian Bank slumped 4.6 percent to C$44.98, the biggest decline in two years. Net income plunged 41 percent to C$27.2 million in the quarter after a restructuring charge, the lender said in a statement.
Royal Bank of Canada retreated 1.3 percent to C$68.45. Toronto-Dominion Bank, with C$862.5 billion in assets, has surpassed Royal Bank as the nation’s largest lender, according to financial statements. Royal Bank had C$860.8 billion in assets as of Oct. 31. TD slipped 0.8 percent to C$95.18.
B2Gold slumped 6.1 percent to C$2.15 and Iamgold fell 6 percent to C$4.06 as gold futures for February delivery retreated 0.3 percent to $1,257.20 in New York. Gold is on pace for the first annual drop in 13 years.
Bombardier Inc. lost 2.3 percent to C$4.50 for a third day of declines. The aircraft manufacturer is 118 orders short of a target for 300 firm orders of the CSeries jet by the time the aircraft enters service next year. Air Canada, the best-performing stock in the S&P/TSX this year, rose 0.7 percent to C$7.68. The stock has rallied 339 percent in 2013.
Bombardier is in discussions with Air Canada about a possible order, said Mike Arcamone, Bombardier Commercial Aircraft President, in an interview.