Canada Stocks Little Changed as Miner Rally Offsets Bank Slump

  • Traders now pricing in 30% chance of June Fed rate hike
  • Measure of global stocks slide third day to six-week low

Canadian stocks ended little changed after an afternoon rally in gold producers nearly wiped out losses among financial and industrial firms.

The benchmark S&P/TSX Composite Index retreated 0.1 percent to 13,817.32 at 4 p.m. in Toronto. The Canadian benchmark equity gauge has lost 0.7 percent in two days, mirroring a slide in global equities after the Federal Reserve signaled it’s prepared to raise U.S. interest rates as soon as next month.

Global equities pared losses as the trading day persisted, as a dollar rally evaporated, easing pressure on commodities prices. That helped materials shares climb, while banks slumped 0.5 percent and industrial shares lost 1.1 percent. Seven of 10 industries in the S&P/TSX lost ground on trading volume 4.6 percent lower than the 30-day average,

Canadian Natural Resources Ltd. and Husky Energy Inc. declined at least 1.5 percent as energy producers fell. Barrick Gold Corp. jumped 3.6 percent as gold producers rebounded from an early loss.

Investors are scrutinizing data from the world’s largest economy after April Fed meeting minutes released Wednesday showed policymakers said boosting borrowing costs in June was “appropriate” should the U.S. economy continue to improve. That prompted traders to boost the probability of a rate hike next month to 30 percent. A report Thursday showed initial jobless claims in the U.S. dropped last week from a one-year high. 

Energy and raw-materials industries account for about 32 percent of the broader benchmark by market capitalization and have led gains this year, with the materials group surging as much as 43 percent for its best year-to-date performance in three decades. That’s helped the S&P/TSX post one of the best performances this year among developed economies, behind only New Zealand out of 24 markets.

Russel Metals Inc. tumbled 6.5 percent to lead industrials lower after Raymond James lowered its rating for the steel distributor to the equivalent of a hold, from outperform. Russel has rallied 38 percent this year. The stock now has zero buys, four holds and one sell, according to data compiled by Bloomberg.

Potash Corp. Of Saskatchewan Inc. climbed 4.1 percent, the most in a month. A potash contract with China is expected in the next couple of weeks, Potash Corp. CEO Jochen Tilk said during the BMO Farm to Market conference in New York. Potash prices have stabilized in the U.S. and the company is seeing improvements in prices, Tilk said.

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