Canadian stocks fell for the first time in nine days as the nation’s largest lenders dropped after Moody’s Investors Service cut its credit outlook for the banks.
Bank of Montreal and Royal Bank of Canada both lost 0.5 percent as Moody’s cut the outlook for the nation’s seven largest banks to negative due to rules that would limit government support. Sherritt International Corp. slumped 3.9 percent as nickel fell in London to the lowest in almost four weeks. AuRico Gold Inc. and Argonaut Gold Inc. jumped more than 6.7 percent to pace gains among gold producers.
The Standard & Poor’s/TSX Composite Index fell 12.25 points, or 0.1 percent, to 14,892.13 at 4 p.m. in Toronto. The benchmark equity gauge is 1.2 percent away from its record closing high of 15,073.13 on June 18, 2008. The price-to-earnings ratio for the benchmark equity gauge is 19.9, the highest since 2011.
Bank of Montreal dropped 0.5 percent to C$76.81 and Royal Bank of Canada declined 0.5 percent to C$74.84 as financial companies slipped 0.4 percent as a group. Five of 10 industries in the S&P/TSX retreated on trading volume about 10 percent higher compared with the 30-day average.
Moody’s today changed its outlook for the nation’s largest lenders to negative from stable. In a statement, the credit ratings company said “balance of risk for the Canadian banks’ senior debt holders and uninsured depositors has shifted to the downside” as a result of pending government legislation that will probably shift the burden of bank bailouts to bondholders.
Oryx Petroleum Corp., which explores for oil in Africa and the Middle East, sank 3.5 percent to C$13.51 as Iraqi forces fought a breakaway al-Qaeda group across northern and central Iraq for control of a region that’s home to a key oil refinery.