Canada Stocks Fall as Trade Deficit, Dollar Weigh on Exporters

  • Scotiabank extends three-day slide on restructuring charge
  • WTI oil settles under $44 a barrel as Suncor cuts output

Canadian stocks fell to a three-week low as data showing a record trade deficit in March fueled declines in commodity and industrial shares.

The benchmark S&P/TSX Composite Index dropped 0.6 percent to 13,632 at 4 p.m. in Toronto, capping a third day of losses. The gauge now trades at 20.8 times earnings, about 9.4 percent higher than the 19 times earnings valuation of the S&P 500 Index, data compiled by Bloomberg show.

Six of 10 main industries in the S&P/TSX declined, led by a 2.4 percent drop in raw-materials shares. Energy producers and industrials also retreated, while telecommunications providers and technology companies advanced to offset some losses.

The resource-dominant S&P/TSX has sputtered to start the month of May, as commodities producers slumped after a rally of more than 40 percent in the first four months of the year. Global equities have slowed amid the uncertain outlook for growth and speculation higher interest rates in the U.S. will boost the dollar’s value.

Canada’s trade gap unexpectedly widened to a record C$3.41 billion in March, according to a Statistics Canada report Wednesday, as exports to the U.S. fell 6.3 percent reviving concern a stalling American recovery will derail Canada’s recent rebound. The trade surplus with the U.S. shrank to its narrowest since December 1993, the data showed.

Materials producers slumped Wednesday as metals from copper to gold retreated. Crude ended the day little-changed, settling below $44 a barrel in New York, after declining 5.2 percent in the previous three sessions. Suncor Energy Inc. has reduced its crude output amid a raging wildfire in Fort McMurray in Alberta, prompting tens of thousands to flee. Suncor shares declined 2.2 percent to a two-month low.

Bank of Nova Scotia dropped 1.3 percent for a third straight decline, extending losses during that period to 4.9 percent after Canada’s third largest lender said it will post a C$275 million ($214 million) restructuring charge in the second quarter to cover the cost of job cuts and other productivity enhancements as it shifts to digital banking.

Maple Leaf Foods Inc. jumped 6.8 percent, to a record close, after posting first-quarter earnings ahead of analysts’ estimates as margins improved. Torstar Corp. lost 5.9 percent, the most since March 18, after posting a first-quarter loss amid the challenging print advertising environment.

Lucara Diamond Corp. surged 9.1 percent to a record after reporting first-quarter earnings ahead of analysts’ estimates Tuesday. The diamond producer may earn as much as 48 percent of the proceeds from the sale of the biggest diamond unearthed in more than a century. That could deliver about $35 million of the $70 million value estimated by Sotheby’s, Chief Executive Officer William Lamb said in an interview with Bloomberg News.

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