Canada Stocks Slide Eighth Day to Cap Worst Week Since August

  • Declines in gold producers offset Canada, U.S. jobs reports
  • S&P/TSX extends losses after entering bear market yesterday

Canadian stocks slid for an eighth day and posted the biggest weekly loss since August, as a decline in gold producers overshadowed labor market reports that exceeded expectations.

The Standard & Poor’s/TSX Composite Index fell 2.76 points to 12,445.45 at 4 p.m. in Toronto, after earlier advancing as much as 0.8 percent. The gauge lost 4.3 percent in the first week of trading in 2016 and capped yesterday a 20 percent plunge from its September 2014 record, hitting a magnitude in declines commonly defined as a bear market. Canada is the second Group of 7 country to see its benchmark enter a bear market, after Germany’s DAX Index did in August.

Employers in Canada added 22,800 jobs in December, almost three times the median projection by economists who saw an increase of 8,000 jobs, according to a Bloomberg survey. U.S. payrolls surged by 292,000, topping the highest forecast in a Bloomberg survey.

Underlying concerns remain about the makeup of the gains in employment, Avery Shenfeld, chief economist at Canadian Imperial Bank of Commerce, wrote in a note to clients. Workers designated as employees by Statistics Canada fell by 17,500 while the self-employed category jumped 40,300. Full-time positions also fell, the data show.

“A nice headline masking a continuing trend for weak hiring by private sector companies,” Shenfeld said. “All of the job growth was in Ontario, consistent with our view that Canada’s largest province is in reasonable shape.”

The S&P/TSX Gold Index slipped 2.2 percent as the price of the metal, which rallied this week as investors sought a haven, fell 0.5 percent. Barrick Gold Corp. lost 3.4 percent.

Canada’s resource-rich benchmark has been one of the worst-performing markets in the world in the past year, as oil prices in New York and London collapsed to decade lows. Valuations for Canadian stocks have tumbled about 15 percent to 19.2 times earnings, from a high of 22.7 in April.

Even as crude extended losses to a 12-year low, Canadian energy producers added 1.1 percent, halting two days of declines.

Global equity markets closed lower Friday after a chaotic week of trading in which China halted trading twice before suspending a new circuit-breaker system and lowered the reference rate for the yuan. A gauge of developed and emerging nation stocks fell, as the U.S. benchmark Standard & Poor’s 500 Index lost 1.1 percent in New York and posted its worst week since 2011.

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