Canadian Stocks Fall Most Since June on Syria Tensions
Canadian stocks fell, giving the benchmark index its biggest drop since June, on growing tension over possible military action in Syria.
Raw-materials companies fell 3.7 percent, reversing an earlier rally of as much as 1.3 percent amid a surge in gold prices. Energy shares also erased an advance amid a jump in oil. OceanaGold Corp. and Niko Resources Ltd. tumbled more than 7.4 percent. Bank of Nova Scotia dropped 1.7 percent while Bank of Montreal increased 0.4 percent as investors weighed quarterly earnings reports.
The S&P/TSX fell 169.09 points, or 1.3 percent, to 12,591.21 at 4 p.m. in Toronto, the most since June 24. The index trimmed its gain for the month to 0.8 percent. Trading volume was 4.7 percent higher than the 30-day average at this time of the day.
“The gold stocks are the surprise,”John Kinsey, a portfolio manager with Caldwell Securities Ltd. in Toronto, said in a phone interview. The firm manages about $1 billion. “They were up this morning and they have all turned around now. If you are nervous about the market, you tend to sell the ones where you have a profit. It has been a pretty good month for the gold stocks and the oil stocks.”
The benchmark gauge fell yesterday, erasing an earlier gain, after U.S. Secretary of State John Kerry said the nation will hold Syria’s government accountable for using chemical weapons, fanning concern unrest may disrupt Middle East oil supplies.
President Barack Obama is under growing pressure from U.S. allies and Congress to go beyond denunciations of Syria and take military action after the Aug. 21 attack that opposition groups say killed more than 1,300 people. Iran’s Foreign Ministry warned that a U.S. attack on Syria would drag the whole region into conflict.
All 10 industries in the benchmark index fell. Technology companies slid 2.6 percent, with CGI Group Inc. dropping 3.3 percent to C$34.45 and BlackBerry Ltd. declining 3.8 percent to C$10.54.
Gold shares dropped after erasing an early rally. The S&P/TSX Gold Index dropped 4.2 percent, paring its gain for the month to 14 percent. The metal’s price jumped to the highest since May as the Syrian political tension increased demand for the precious metal as a store of value.
OceanaGold slid 9.4 percent to C$1.94. Alacer Gold Corp. tumbled 5.1 percent to C$3.32.
Energy companies lost 0.2 percent, trimming their advance for the year to 2.6 percent. Niko Resources declined 7.4 percent to C$5.13. West Texas Intermediate crude rose to an 18-month high on speculation that tension in Syria will disrupt Middle East supplies.
The S&P/TSX Commercial Banks Index fell 0.9 percent even as two of its eight members reported third-quarter earnings that beat analysts’ estimates.
Bank of Montreal, the nation’s fourth-largest lender by assets, increased 0.4 percent to C$66.05, the highest close since 2007. Profit topped analysts’ estimates on record consumer lending and lower provisions for bad loans.
Bank of Nova Scotia (BNS) fell 1.7 percent to C$57.71. Canada’s third-largest lender by assets said net income for the period fell 14 percent from a year earlier when the bank had a one-time gain. Earnings from its global banking and markets business slipped 3 percent in the latest quarter.
National Bank of Canada reports results tomorrow, followed by Canadian Imperial Bank of Commerce, Royal Bank of Canada and Toronto-Dominion Bank on Aug. 29. The country’s six biggest banks are expected to post average per-share profit growth of 3.3 percent excluding some items, according to Robert Sedran, an analyst with CIBC.
To contact the editor responsible for this story: Lynn Thomasson at firstname.lastname@example.org