Canada Stocks Erase Losses as Financials Rebound, Gold Rallies

Canadian stocks erased losses in the last half hour of trading as financial shares reversed earlier declines and gold gained the most in a week.

Manulife Financial Corp. added 2.6 percent and Bank of Nova Scotia rose 0.2 percent. Goldcorp Inc. jumped 3.2 percent, while Barrick Gold Corp. retreated 1.3 percent after it said it has ended talks with China National Gold Group Corp. to sell its African unit. Sears Canada Inc. lost 3.5 percent after same-store sales fell for the nine-week period ended Dec. 29.

The Standard & Poor’s/TSX Composite Index rose 5.26 points, or less than 0.1 percent, to 12,504.81 in Toronto, reversing earlier losses of as much as 0.4 percent. The benchmark gauge has risen 0.6 percent this year, trailing every developed market in the world.

“We’re in a holding pattern: Everybody was waiting for the fiscal cliff, and we had a rally after that, but now there seem to be other mini-cliffs that the market is waiting for,” said Anish Chopra, managing director and fund manager with TD Asset Management Inc. in Toronto. The firm manages about C$204 billion ($206.5 billion).

The S&P/TSX rose 1.8 percent last week as a budget compromise was reached in Washington that averted most of the so-called fiscal cliff of spending cuts and tax increases.

Gold Futures

Goldcorp added 3.2 percent to C$35.81. Futures for February delivery of the metal rose 1 percent to settle at $1,662.20 an ounce on the Comex in New York amid increasing demand from China, the world’s second-biggest buyer. That was the biggest gain for a most-active contract since Dec. 31.

Materials producers and financial companies contributed most to gains in the S&P/TSX as six of 10 industries rose.

Manulife added 2.6 percent to C$14.39. Bank of Nova Scotia rose 0.2 percent to C$57.77.

Canadian Natural Resources Ltd. declined 1.5 percent to C$29.34 after an executive said the company needs to see higher returns and lower costs before developing its gas projects. Suncor Energy Inc., Canada’s largest oil producer, slipped 0.3 percent to C$33.14 and Encana Corp. declined 1.9 percent to C$19.55.

Barrick decreased 1.3 percent to C$33.14 after cutting off sale talks with China National for its African unit, African Barrick Gold Plc. African Barrick was spun off by Barrick in March 2010 and has since struggled to meet production targets amid operational setbacks.

Sears Canada dropped 3.5 percent to C$9.70 after its parent, Sears Holdings Corp., said the Canadian unit’s same-store sales during the nine-week holiday shopping period slid 5.8 percent.

Fourth-quarter earnings before certain items including taxes and interest is expected to be about half of the year-ago result for the Canadian unit, Sears said in a statement. It cited a decline in electronics sales as well as unseasonably warm temperatures in most parts of Canada.

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