Canadian Stocks Fall on Chinese Banks, European Debt Concerns
Canadian stocks fell for a second day as energy, base-metal and financial shares declined on concerns the European debt crisis will impair the global recovery and Chinese banks will cut back on lending.
Suncor Energy Corp., Canada’s largest oil and gas producer, lost 2.7 percent as the U.S. Dollar Index climbed to the highest level since September. Royal Bank of Canada, the country’s biggest lender by assets, decreased 1.5 percent after two officials familiar with negotiations said Ireland may need 85 billion euros ($114 billion) in a rescue package. Teck Resources Ltd., Canada’s largest base-metals and coal producer, retreated 4.1 percent as copper and zinc fell.
The S&P/TSX dropped 135.26 points, or 1.1 percent, the most in seven days, to 12,793.75.
“Global events are rattling confidence a bit,” said Mathieu Roy, a money manager at Louisbourg Investments Inc. in Moncton, New Brunswick, which oversees C$1.5 billion ($1.46 billion). “Energy and base metals are particularly impacted by global growth and specifically by China.”
The benchmark has declined 2 percent since Nov. 8 after surging 14 percent in the prior four months. The rally has trailed off as concern has mounted that more European countries will have trouble paying their debts and China twice increased reserve requirements for banks.
China’s largest banks are approaching government limits on lending for the year and plan to stop expanding their loan books, according to four people with knowledge of the matter who spoke on condition of anonymity. China is the world’s second- biggest energy consumer behind the U.S. and largest user of industrial metals.
Crude oil for January delivery lost 0.6 percent, while natural gas slipped 0.2 percent.
Suncor decreased 2.7 percent to C$33.95. Canadian Natural Resources Ltd., Canada’s second-largest energy company by market value, retreated 2.2 percent to C$39.10. Talisman Energy Inc., an oil and gas producer with operations in North America, the North Sea and Indonesia, fell 2.6 percent to C$19.45.
Twelve of 13 companies in an index of S&P/TSX base-metals and coal producers dropped. Teck declined 4.1 percent, the most since July 5, to C$48.82. Lundin Mining Corp., which produces base metals in Europe, lost 5.1 percent to C$6.34.
The MSCI World/Financials Index slumped to a two-month low after European officials, who spoke on condition of anonymity because the talks are private, said the European Union and International Monetary Fund may need to provide 50 billion euros for the Irish government and 35 billion euros for Irish banks.
Royal Bank, Manulife
In Canada, Royal Bank slipped 1.5 percent to C$54. Bank of Nova Scotia, the country’s third-largest bank, retreated 1.6 percent to C$53.33. Manulife Financial Corp., North America’s fourth-biggest insurer, fell 3.4 percent to C$14.38.
The S&P/TSX Gold Index climbed for a fifth day as the precious metal rose 1.5 percent.
Barrick Gold Corp., the world’s largest gold producer increased 1.7 percent to C$51.95 after receiving an “overweight” rating in new coverage from Patrick Chidley, an analyst at HSBC Holdings Plc. Centerra Gold Inc., which mines in Kyrgyzstan and Mongolia, advanced 4.1 percent to C$17.71.
Eastern Platinum Ltd. fell 9.1 percent to C$1.59 for the biggest decline in the S&P/TSX. The platinum miner with operations in South Africa said it would sell 195 million shares at C$1.55 to raise C$302.3 million.
CIC Energy Corp., a Nassau, Bahamas-based company developing a coal mine and power plant in Africa, soared 32 percent to a two-year high of C$6.86 after agreeing to be acquired by JSW Energy Ltd. of Mumbai. JSW is to pay C$7.42 a share for CIC Energy.
Alimentation Couche-Tard Inc., the owner of Mac’s and Circle K convenience stores, climbed 2.7 percent to C$25.95. The company said it earned 56 cents a share in the second quarter, beating the average of seven analyst estimates by 13 percent, excluding certain items.
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