- Oil surplus seen persisting amid Saudi Arabia, Iran expansion
- Valeant climbs after naming former Perrigo CEO Papa new head
Canadian stocks fell a third day, the longest slump in three weeks, as energy producers retreated after crude tumbled from a five-month high amid signs a global glut will persist.
The benchmark Standard & Poor’s/TSX Composite Index lost 0.6 percent to 13,795.99 at 4 p.m. in Toronto, extending losses during a three-session slide to 0.8 percent. The gauge remains one of the best-performing developed markets in the world this year with a 6 percent gain. Trading volume was 15 percent lower than the 30-day average.
Encana Corp. and Crescent Point Energy Corp. fell more than 3.1 percent as energy producers retreated 1.4 percent as a group, the most in the S&P/TSX. All but two of the group’s 50 members retreated. Eight of 10 industries in the benchmark Canadian equity gauge declined. Precision Drilling Corp. fell 5.5 percent, the most in a month, after reporting a first-quarter loss.
Nevsun Resources Ltd. sank 9.8 percent, the most in three years, after agreeing Sunday to buy Reservoir Minerals Inc. in a $365 million cash and stock deal that secures ownership of the Timok copper project in Serbia. Nevsun CEO Cliff Davis said in an interview with Bloomberg he has no intention to sell the Timok project.
The resource-dominant S&P/TSX remains closely linked to moves in commodities prices, as a rebound in producers has fueled a 17 percent recovery for the S&P/TSX from a low on Jan. 20, after tumbling into a bear market earlier in the month. Raw-materials and energy producers are the two top-performing industries in Canada so far this year, up more than 13 percent.
The Canadian benchmark now trades at 22 times earnings, about 15 percent higher than the 19.1 times earnings valuation of the Standard & Poor’s 500 Index, according to data compiled by Bloomberg.
Oil declined 2.5 percent in New York from the highest close in five months. Saudi Arabian Oil Co. will complete an expansion at its Shaybah oil field by the end of May, allowing the world’s largest crude exporter to maintain total capacity at 12 million barrels a day, according to two people with knowledge of the plan. Iran has also increased output by 1 million barrels a day since sanctions were lifted in January, Shana reported.
Valeant Pharmaceuticals International Inc. lost 1.6 percent, halting a five-day rally. Valeant named Perrigo Co.’s former Chief Executive Officer Joseph Papa as its new CEO and chairman, set to start in early May. He replaces Michael Pearson, who presided over a steep climb and faster fall as the drugmaker has come under scrutiny by lawmakers and regulators over its business practices.
Bombardier Inc. rose 5.3 percent, to a September high, with the planemaker in negotiations about a deal with a prospective new airline serving the tourist island of Qeshm in southern Iran.