Canada Stocks Fall to 3-Week Low as Ukraine Tension EscalatesEric Lam
Canadian stocks fell to a three-week low amid rising tension in Ukraine and a slump in commodities after a report showed the Chinese service industries stagnated in July.
Imperial Metals Corp. plunged 39 percent after the copper and gold producer reported a breach in the waste storage facility at its Mount Polley mine in British Columbia. Lundin Mining Corp. and Copper Mountain Mining Corp. retreated more than 1.5 percent as copper capped the biggest decline in eight weeks. Silver Standard Resources Inc. retreated 4.6 percent as silver prices dropped. Bonavista Energy Corp. lost 5 percent to pace declines among oil producers as crude dropped to a six-month low.
The Standard & Poor’s/TSX Composite Index lost 27.55 points, or 0.2 percent, to 15,187.71 at 4 p.m. in Toronto, the lowest close since July 15. The S&P/TSX was closed yesterday for a holiday in Ontario. The benchmark Canadian equity gauge closed at a record on July 30.
Russian President Vladimir Putin ordered the government to prepare a response to U.S. and European sanctions as Poland warned that a renewed buildup of Russian troops on Ukraine’s border suggests a possible invasion.
Putin is showing no sign of backing down over Ukraine since the U.S. and the European Union tightened sanctions last week. Polish Foreign Minister Radoslaw Sikorski said Russia had restored its combat readiness on the Ukraine border. He did not give any indication that an incursion was imminent.
The services Purchasing Managers’ Index for China declined to 50.0, the dividing line between expansion and contraction, from June’s 53.1, HSBC Holdings Plc and Markit Economics said today. A similar official gauge released Aug. 3 dropped to a six-month low of 54.2.
Bonavista Energy fell 5 percent to C$13.68, the biggest loss in a year, and Penn West Petroleum Ltd. lost 2.3 percent to C$8.12 as energy stocks declined 0.4 percent as as group. Five of 10 industries in the S&P/TSX retreated.
Crude fell for the sixth time in seven days in New York amid forecasts that U.S. supplies will rebound from near six-year lows.
Imperial Metals sank 39 percent to C$10.19, its biggest loss ever. The storage facility at Mount Polley was breached early yesterday morning, Imperial said in a statement, releasing an undetermined amount of water and tailings, the materials left over after processing ore to extract valuable metals. The breach has been stabilized, although the cause of the incident is still unknown, the company said today.
Valeant Pharmaceuticals International Inc. fell 6 percent to C$121.44, the lowest close since January, after Allergan Inc. said Valeant’s second-quarter earnings results and disclosures were “insufficient, inconsistent” and lacking supporting data.
Glass Lewis & Co. in a report meanwhile criticized Allergan’s “cumbersome” bylaws and recommended shareholders support a special meeting to help Valeant’s efforts to take over the company. Valeant, backed by activist investor Bill Ackman, is pursuing a hostile takeover of Allergan.