Canadian Stocks Fall as Oil, Gold Producers Tumble With Prices

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Canadian stocks fell, erasing an earlier gain, as a slide in commodities producers overshadowed an equities rally in China and Japan.

Energy and raw-material producers paced a midday drop in equities. Gold prices fell to a four-week low, and crude declined 3.9 percent in New York on estimates U.S. stockpiles rose ahead of a data release Thursday. Canadian Oil Sands Ltd. lost 3.1 percent.

The Standard & Poor’s/TSX Composite Index fell 98.82 points to 13,531.85 at 4 p.m. in Toronto. The equity gauge has dropped 7.5 percent this year.

Canadian and U.S. shares failed to keep pace with increases in Asian and European markets. Japan’s Nikkei 225 Average soared 7.7 percent, the most since October 2008, amid speculation a selloff that drove valuations to an 11-month low was overdone. Equities rallied a second day in China, Canada’s second-largest trading partner.

Canada’s benchmark index erased an earlier gain of as much as 1 percent after the Bank of Canada maintained its main interest rate at 0.5 percent. The central bank has made two cuts this year amid the plunge in oil prices.

“In this market the overall sentiment can change very quickly,” said Prab Sagoo, a Canadian equity market analyst at Nasdaq Advisory Services.

Rates Unchanged

Stephen Poloz, governor of the central bank, was expected to leave the main interest rate unchanged in the lone decision during the Canadian federal election campaign. In its decision the Bank of Canada said a weaker currency and household spending are leading a recovery from the shock of lower oil prices.

Global shares are rebounding from the worst month since May 2012, as the MSCI World All-Country World Index tumbled 7 percent in August after Chinese stocks slumped amid increasing concern economic growth in the country was stalling.

The resource-rich S&P/TSX has been one of the worst-performing developed markets in the world this year as crude plunged. Energy and raw-materials producers have the biggest declines among 10 industries in the S&P/TSX this year.

Bombardier Inc. jumped a record 23 percent to pace gains among industrials stocks. The company said its transportation rail unit wasn’t for sale after a report the maker of planes and trains had rejected an offer by a Chinese company. Railway operator Canadian National Railway Co. increased 0.5 percent.