Canadian Stocks Fall, Pare Weekly Gain Ahead of Doha Meeting

Canadian Stocks Fall for Second Day
  • Long-awaited talks on production cap set for April 17
  • Bombardier rises, said to be near C Series sale to Delta

Canadian stocks fell a second day, paring a weekly gain, as crude tumbled the most in two weeks ahead of a long-awaited meeting of suppliers in Doha to discuss an output freeze.

The benchmark Standard & Poor’s/TSX Composite Index equity gauge fell 0.2 percent to 13,637.20 at 4 p.m. in Toronto, paring a weekly gain to 1.8 percent. The S&P/TSX remains one of the best-performing developed markets in the world this year with a 4.8 percent gain.

West Texas Intermediate crude slipped a third day ahead of a key meeting this weekend on a potential output freeze. Futures dropped 2.8 percent to settle at $40.36 a barrel, the biggest drop since April 4 and reducing their gain for the week to 1.6 percent. There is a “positive feeling” among producers that an agreement may be reached at the meeting April 17 to restore stability, according to Qatar.

The International Energy Agency yesterday predicted in a report global oil markets will “move close to balance” in the second half of the year. Oil prices have rebounded from 12-year lows in the past two months.

Energy producers in the S&P/TSX retreated the most Friday, with a 1.7 percent decline. Canadian Natural Resources Ltd. and Crescent Point Energy Corp. fell more than 2.2 percent. Health-care shares advanced to offset the declines on trading volume 17 percent lower than the 30-day average.

Bombardier Inc. added 1.9 percent to an October high, with the aircraft manufacturer said to be near an agreement to sell as many as 75 C Series jetliners to Delta Air Lines Inc., according to a person familiar with the talks. The deal would be the largest to date for the struggling program.

Trading volume for Bombardier stock was almost four times the three-month average today after the company was said to reject an initial investment proposal from the Canadian government with the two sides still far apart on a deal, according to people familiar with the talks.

The resource-dominant S&P/TSX remains closely linked to moves in commodities prices, as a rebound in producers through the first quarter has fueled a 15 percent recovery for the S&P/TSX from a 2013 low on Jan. 20. The Canadian benchmark now trades at 21.7 times earnings, about 15 percent higher than the 19 times earnings valuation of the Standard & Poor’s 500 Index, according to data compiled by Bloomberg.

Mitel Networks Corp. plunged 9.6 percent, the most since August, after the communications company agreed to buy Polycom Inc. in a $1.96-billion deal in cash and stock. The deal represents an 11 percent premium compared with Polycom’s close on Thursday.

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