Canadian Stocks Little Changed as Oil Offsets Gold GainMichelle F. Davis
Canadian stocks were little changed as energy shares slumped with oil and the International Monetary Fund cut its global-growth outlook by the most in three years, offsetting gains among mining companies.
Gran Tierra Energy tumbled 32 percent, the most ever, as the company said work at its Eslabon Sur well in South America had been suspended. Suncor Energy Inc. fell 1.7 percent to pace declines among energy shares. Barrick Gold Corp. and Goldcorp Inc. advanced more than 2.4 percent as gold futures posted the longest rally in 11 months. OceanaGold Corp. rallied 6.7 percent after a UBS analyst recommended the stock.
The Standard & Poor’s/TSX Composite Index slid 4.06 points, or less than 0.1 percent, to 14,308.44 at 4 p.m. in Toronto.
Crude fell as much as 5.8 percent in New York and 2.2 percent in London after Iraqi crude production surged to a record and the IMF cut its global growth outlook.
The world economy will grow 3.5 percent in 2015, down from the 3.8 percent pace projected in October, the IMF said in its quarterly global outlook released late Monday in Washington. The IMF said slowing growth almost everywhere except the U.S. will more than offset the benefits from lower oil prices.
Data today showed Canadian factory sales dropped faster than economists predicted in November, with the second straight decline ranging from automobiles to food.
Bank of Canada Governor Stephen Poloz will deliver his latest estimates for inflation and growth tomorrow along with a decision on interest rates. Policymakers must account for a plunge in the price of crude oil, Canada’s biggest export.
Canada’s dollar weakened to the lowest in more than five years today on speculation the central bank may signal it’s more likely to lower interest rates than raise them when it releases a growth outlook tomorrow. BOC hasn’t raised its benchmark interest rate in more than four years.
Oil companies comprised eight of the 10 worst performers today in the benchmark index, with Gran Tierra dropping 32 percent and Pacific Rubiales Energy Corp. losing 14 percent. Suncor Energy slid 1.7 percent.
Five of 10 industries in the S&P/TSX slumped on volume 10 percent higher than the 30-day average.
Gold rose 1.4 percent to the highest in almost five months as concerns about global growth led to “safe-haven buying in gold,” according to Jonathan Butler, a precious metals strategist at Mitsubishi Corp.
OceanaGold rose 6.7 percent as UBS equity analyst Jonathan Battershill upgraded the company to buy from neutral. B2Gold Corp. increased 7.4 percent to a near five-month high as the company announced a higher-grade gold mineral resource estimate in a zone adjacent to its new mine in Namibia.
Potash Corp. of Saskatchewan Inc. rose 3.4 percent following an S&P report that said North American potash producers are poised to benefit from stabilizing market conditions and the completion of capacity expansion projects.
Canadian Pacific Railway Ltd. gained 2.2 percent and Dream Unlimited Corp. increased 3.2 percent after the companies said they formed a real estate venture to develop about 30 of the rail operator’s properties in Canada and the U.S.