Canadian Stocks Fall as Energy, Raw-Materials Shares Slump
Canadian stocks fell, snapping a three-day advance in the benchmark index, as energy and raw- materials shares dropped after oil and gold prices slumped.
Encana Corp. and Savanna Energy Services Corp. lost as much as 1.1 percent after the International Energy Association cut its 2013 global demand estimate for oil and U.S. inventories unexpectedly rose. New Gold Inc. and Iamgold Corp. slid at least 4.8 percent as gold fell for the first time in five days. Royal Bank of Canada and Bank of Nova Scotia dropped more than 1.3 percent.
The Standard & Poor’s/TSX Composite Index declined 138.23 points, or 1.1 percent, to 12,740.37 at 3:03 p.m. in Toronto. The gauge has gained 2.5 percent this year and closed yesterday at its highest level since July 2011. Trading volume was 9.2 percent lower than the 30-day average at this time of day.
“Certainly we had a larger-than-expected build in crude- oil inventories, so that’s a negative,” Peter Buchanan, Toronto-based senior economist at CIBC World Markets, said in a telephone interview today.
Raw-materials stocks fell the most in the S&P/TSX, losing 1.9 percent as a group. Energy producers and banks slid more than 1 percent, as nine of the gauge’s 10 groups retreated.
Iamgold fell 8.2 percent to C$6.91 and New Gold dropped 4.8 percent to C$9.55. Gold declined 0.2 percent to settle at $1,588.40 an ounce in New York.
Bullion ended its longest rally since August after a deputy Chinese central bank governor said the country may limit its gold holdings to 2 percent of total foreign exchange reserves. A better-than-expected U.S. retail report increased optimism about the world’s largest economy and the dollar rose.
Savanna, a provider of oil-well and drilling services, slid 3.8 percent to C$6.72. Encana dropped 1.1 percent to C$19.51. TransCanada Corp. fell 1.5 percent to C$48.33 after Canadian heavy oil weakened on the spot market after strengthening more than $10 a barrel in the previous six days.
Oil erased gains after the Energy Information Administration said U.S. inventories climbed an eighth straight week. Earlier, Paris-based IEA trimmed its 2013 global demand forecast by 60,000 barrels a day to 90.6 million. Crude fell 2 cents to settle at $92.52 a barrel on the New York Mercantile Exchange.
Financial shares fell. Royal Bank of Canada lost 2 percent to C$61.26 and Scotiabank dropped 1.3 percent to C$59.89. Toronto-Dominion Bank slipped 0.9 percent to C$84.16.
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