Canada Stocks Fall as Gold Producers Slide, Phone Shares PlungeEric Lam
Canadian stocks fell, following the biggest gain in two months, as gold prices slumped to a 34-month low and phone companies plunged on concern Verizon Communications Inc. is poised to enter the market.
Rogers Communications Inc. and Telus Corp. dropped more than 8 percent after a report that Verizon made an offer for Canada’s Wind Mobile. Barrick Gold Corp., the world’s largest producer of gold, slumped 8.2 percent to a 21-year low. Endeavour Silver Corp. retreated 8.6 percent as silver touched the lowest level since August 2010.
The Standard & Poor’s/TSX Composite Index fell 53.52 points, or 0.5 percent, to 11,951.90 at 4 p.m. in Toronto. Trading volume was 7.1 percent higher than the 30-day average.
The benchmark gauge climbed 1.4 percent yesterday, the most since April 24, after China’s central bank said it will ensure stable money markets and better-than-forecast U.S. data bolstered optimism about the world’s largest economy. The index is down 5.5 percent this month, erasing its gain for 2013 and on track for the first quarterly loss in a year.
“If the government rules on the ability for someone like Verizon to come into the market and create competition in the wireless space, that’s a landmark change to the way these companies do business in Canada,” said Brian Huen, managing partner with Red Sky Capital Management Ltd. in Toronto. He helps manage C$220 million ($210 million).
Telephone stocks plunged 6 percent as a group, the biggest decline since November 2008. Verizon has made a C$700 million offer for Wind Mobile, the Globe and Mail reported today, citing two people familiar with the situation.
Rogers Communications, Canada’s largest wireless carrier, plunged 9.2 percent to C$41.67, the most since October 2008. Telus tumbled 8 percent to C$30.70 and BCE Inc. declined 4.1 percent to C$41.57.
Raw-materials producers sank 2.9 percent as a group to the lowest since December 2008, as 48 of 55 stocks in the gauge retreated. The index has retreated 35 percent this year.
Barrick Gold dropped 8.2 percent to C$15.50, the lowest close since 1992. OceanaGold Corp. retreated 9.2 percent to C$1.09 and Alacer Gold Corp. fell 16 percent to C$1.96 as the price of gold slipped 3.6 percent to settle at $1,229.80 an ounce in New York, the lowest settlement since August 2010.
Endeavour Silver lost 8.6 percent to C$3.08 and Fortuna Silver Mines Inc. tumbled 7.1 percent to C$2.86. Silver dropped 4.8 percent to $18.613 an ounce and earlier fell to the lowest since Aug. 24, 2010.
Bombardier Inc. fell 2.1 percent to C$4.57 after delaying the first flight of its CSeries jet to the end of July instead of June. The company said in a statement it needed additional time to install software upgrades to the aircraft.
BlackPearl Resources Inc. declined 7.6 percent to C$1.47. The oil and gas explorer announced yesterday it was deferring construction of its Onion Lake thermal project after deciding not to proceed with a proposed $350 million term loan due to volatility in debt markets.