Canadian Stocks Fall, Ending Two-Day Gain After Cyprus Bank LevyEric Lam
Canadian stocks dropped for the first time in three days after an unprecedented levy on Cypriot bank deposits threatened to worsen Europe’s debt crisis and hurt demand for raw materials.
Suncor Energy Inc. and Canadian Natural Resources Ltd. retreated at least 0.7 percent as energy shares slumped. Teck Resources Ltd. and First Quantum Minerals Ltd. declined more than 1.4 percent after copper slid to a four-month low. Potash Corp. of Saskatchewan Inc. retreated 1.4 percent after employees of Israel Chemicals Ltd. went on strike to protest a possible takeover by the Canadian company. Barrick Gold Corp. gained 1.3 percent as gold rallied.
The Standard & Poor’s/TSX Composite Index fell 48.27 points, or 0.4 percent, to 12,781.76 at 4 p.m. in Toronto. The S&P/TSX has risen 2.8 percent this year. Trading volume was 0.9 percent higher than the 30-day average.
“Certainly the Cyprus news is affecting the market today,” said Paul Gardner, a fund manager with Avenue Investment Management, in Toronto. He helps oversee about C$300 million ($294 million). “We have to worry about the bigger problem of contagion, but the fact is Greece is still there, and they are accepting their cuts. This is collateral damage from a very small country that means not too much to the European Union.”
Euro-region finance ministers forced depositors in Cypriot banks to share in the cost of rescuing the island nation, reducing the cost of the bailout by 5.8 billion euros ($7.5 billion) to 10 billion euros. The country accounts for less than half a percent of the 17-nation euro-area economy.
Energy shares contributed most to declines in the S&P/TSX, falling 0.7 percent, as seven of 10 industries retreated. Suncor slumped 1.9 percent to C$31.08, and Canadian Natural Resources lost 0.7 percent to C$33.31.
Crude for April delivery rose 0.3 percent to settle at $93.74 a barrel, erasing earlier losses of as much as 1.8 percent. European policy makers signaled flexibility on the application of a bank tax in Cyprus, saying easing the cost to smaller savers was up to the local government.
Teck, Canada’s largest diversified miner, fell 2.2 percent to C$29.85. First Quantum lost 1.4 percent to C$21.43. Copper futures for delivery in May tumbled 2.6 percent to settle at $3.428 a pound at 1:12 p.m. on the Comex in New York after touching $3.4175, the lowest since Nov. 9.
Barrick Gold, the world’s largest gold producer, rose 1.3 percent to C$29.59. Gold for April delivery climbed 0.8 percent to settle at $1,604.60, a two-week high, as the metal’s appeal as a haven increased amid concerns about European debt.
Potash Corp. fell 1.4 percent to C$41.04. Hundreds of employees from Israel Chemicals blocked a plant entrance to protest the Canadian fertilizer maker’s proposed acquisition, a union representative said in an e-mailed statement. Israel Chemicals said the protest was motivated by issues not related to the potential deal.