Canada Stocks Slide, Erasing Early Gains, on Italy Vote
Canadian stocks fell, reversing earlier gains in the final hour of trading, as partial voting results spurred concern about prospects for a stable government in Italy and a worsening of Europe’s debt crisis.
Royal Bank of Canada, the nation’s largest lender, slumped 1 percent and Manulife Financial Corp., the largest insurer, tumbled 2.1 percent. Suncor (SU) Energy Inc. lost 1.8 percent as crude slipped. Inmet Mining Corp. (IMN) slid 2.8 percent after reaching an agreement with Petaquilla Minerals Ltd. over their Panamanian mines. Eldorado Gold Corp. added 6.3 percent and Goldcorp Inc. climbed 1.3 percent. Cineplex Inc. (CGX) rose 1 percent after analysts predicted it would hit record highs.
The Standard & Poor’s/TSX Composite Index (SPTSX) fell 50.76 points, or 0.4 percent, to 12,650.87 in Toronto, erasing earlier gains of as much as 1 percent. The benchmark gauge is up 1.8 percent in 2013. Trading on Canadian exchanges was 3.5 percent higher than the 30-day average today.
“No matter what people say they’re looking over their shoulders at the Dow and I was surprised the Canadian market hung in as long as it did before people lost their nerve,” David Cockfield, managing director and fund manager with Northland Wealth Management, said from Toronto. His firm manages about C$200 million ($195 million). “We haven’t worried about Europe for a while, so it’s about time. The fact Berlusconi is making a big comeback just discourages everybody.”
Italy may require another vote after the four-way race that ended today was poised to result in a divided parliament. Forecasts by IPR Marketing and state broadcaster RAI showed Pier Luigi Bersani winning the lower chamber and Silvio Berlusconi, former prime minister of Italy, with a blocking minority in the Senate. Bersani, who led in opinion polls throughout the two- month race, campaigned to maintain the budget rigor of outgoing Prime Minister Mario Monti.
Banks fell 0.6 percent as a group in the S&P/TSX, erasing earlier gains of as much as 1.2 percent. Royal Bank dropped 67 Canadian cents to C$63.59 and National Bank of Canada declined 1 percent to C$77.30. Manulife dropped 31 Canadian cents to C$14.84, its lowest close since Feb. 8.
Financial companies are scheduled to begin reporting earnings tomorrow, including results from Bank of Montreal, followed by Royal Bank of Canada (RY), Toronto-Dominion and National Bank of Canada on Feb. 27.
Suncor, Canada’s largest energy company by market value, lost 58 Canadian cents to C$31.37 and Cenovus Energy Inc. slipped 1.2 percent to C$32.40. Crude for April delivery slumped 1 percent to $92.18 a barrel in electronic trading at 5:18 p.m. in New York, the lowest level since Dec. 28.
Inmet fell C$1.89 to C$65.52. The developer of the $6.2 billion Cobre Panama copper project said it agreed with Petaquilla to settle certain claims relating to their adjacent Panamanian projects. Inmet will purchase from Petaquilla as much as $100 million a year of aggregates over three years for use at Cobre Panama, the companies said in a statement.
Petaquilla gained 2 percent to 51 Canadian cents.
Eldorado jumped 62 Canadian cents to C$10.42 and Goldcorp added 42 Canadian cents to C$33.64.
The S&P/TSX Gold index climbed 2.4 percent, its biggest gain since Jan. 10, as 29 of 31 members advanced. Gold futures for April delivery rose 0.9 percent, the most in three weeks, to settle at $1,586.60 an ounce in New York as Russia and Kazakhstan’s central banks increased bullion reserves last month.
Cineplex rose 34 Canadian cents to C$33.44. The operator of 70 percent of Canadian movie theaters is forecast by analysts to advance beyond a record as acquisitions and the addition of in- seat liquor service increases revenue.
To contact the editor responsible for this story: Lynn Thomasson at email@example.com