Canadian Stocks Little Changed; Energy Shares Decline

Canadian stocks rose to the highest level in more than 17 months, reversing earlier losses, as producers of raw materials advanced after the Bank of Japan said it will introduce open-ended asset purchases.

Yamana Gold Inc. and Eldorado Gold Corp. rose at least 1.5 percent as the metal advanced. Nevsun Resources Ltd., which operates a mine in Eritrea, gained 4 percent after the nation’s ambassador dismissed reports of a coup. First Quantum Minerals Ltd. declined 1.9 percent as Inmet Mining Corp. rejected its hostile takeover bid and said it is in talks with third parties for another potential deal. Inmet rose 0.5 percent.

The Standard & Poor’s/TSX Composite Index gained 30.38 points, or 0.2 percent, to 12,824.63 in Toronto, climbing to its highest level since July 2011. The benchmark gauge has gained 3.2 percent this year.

“It’s a very quiet market and we’re still waiting for macro events over the next few months,” said Anish Chopra, managing director and fund manager with TD Asset Management Inc. in Toronto. The firm manages about C$204 billion ($205.2 billion). “Retail data is very modestly ahead of expectations.”

Canadian retail sales rose 0.2 percent to C$39.4 billion ($39.7 billion) in November, Statistics Canada said today, led by record car purchases. Economists surveyed by Bloomberg had forecast unchanged sales.

Raw-materials producers contributed the most to gains in the S&P/TSX as six of 10 industries advanced. Trading volume was 22 percent higher than the 30-day average.

Yamana, Eldorado

Yamana Gold climbed 2.5 percent to C$17.96 and Eldorado Gold rose 1.5 percent to C$13.01. Gold for February delivery increased 0.4 percent to settle at $1,693.20 an ounce in New York after the Bank of Japan pledged to buy about 13 trillion yen ($145 billion) in assets a month from January 2014 and doubled its inflation target without setting a deadline.

Nevsun, which operates the Bisha gold mine in Eritrea, rallied 4 percent to C$4.39 after Araya Desta, the nation’s ambassador to the United Nations, said reports of an attempted coup of President Isaias Afwerki’s government were “nonsensical.” Agence France-Presse and other news agencies reported government forces have withdrawn from the capital.

The shares slumped the most in six months yesterday after reports of the possible coup first surfaced.

Canadian Natural Resources Ltd. declined 0.8 percent to C$30.19. Philip Skolnick, an analyst with Canaccord Genuity, lowered his rating to hold from buy as the company is exposed to risk from the wide differential between the Canadian oil price and benchmark West Texas Intermediate and Brent crude prices.

“This is the most exposed name in the group,” he said in a note to clients today.

First Quantum

First Quantum, which took its cash and stock bid directly to Inmet investors on Jan. 9 after two earlier offers were rebuffed by the board, slipped 1.9 percent to C$20.92. Inmet today recommended investors reject First Quantum’s C$5.1 billion bid as it undervalues the company, the company said in a statement. Inmet has also approached third parties interested in “considering alternative transactions” for the company and its assets.

First Quantum also lacks the experience developing a mine the size of Inmet’s Cobre Panama copper project in Panama, the company said. Inmet climbed 0.5 percent to C$71.29.

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