Canada Stocks Fall to Halt Four-Day Rally as Oil, Metals Drop

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  • Global risk assets drop as investor focus returns to growth
  • Top oil trader warns crude price rebound running out of steam

Canadian stocks fell, snapping a four-day rally, as commodities tumbled with metals and crude on renewed concern about the strength of the global economy after the U.K.’s vote to leave the European Union.

The S&P/TSX Composite Index lost 0.3 percent to 14,219.57 at 4 p.m. in Toronto, for the first loss in five sessions, paring declines of as much as 0.8 percent. Canadian equities joined declines in stocks around the world after Bank of England Governor Mark Carney warned there may be a “material slowing of the economy” as the risks from Britain’s decision to leave the EU have started to crystallize. Trading volume in the benchmark was about 7 percent higher than the 30-day average.

The Canadian benchmark had rebounded 4.2 percent in the past four trading sessions after slumping the most since February in the two days after the Brexit vote. The S&P/TSX trails New Zealand as the world’s top-performing developed market in 2016, according to data compiled by Bloomberg. 

Energy producers lost 0.7 percent as six of 10 industries in the S&P/TSX declined. Crescent Point Energy Corp. and Encana Corp. dropped at least 2.1 percent as New York crude tumbled to below $47 a barrel. There was no settlement Monday because of the U.S. holiday.

Oil prices won’t rise much further over the next year and a half as demand slows, according to Vitol Group of Cos., the world’s largest independent oil-trading house. Brent crude will end 2016 at about $50 a barrel and rise to about $60 by the end of 2017, Vitol Chief Executive Officer Ian Taylor said in an interview with Bloomberg TV. Energy producers account for about 20 percent of the S&P/TSX by market capitalization.

Raw-materials producers have led the charge for Canada with a 58 percent gain this year, the best year-to-date performance for the industry in at least 30 years, while energy producers are second with an 18 percent increase, according to data compiled by Bloomberg. Gold prices are on track for the biggest annual increase since 2010.

On Tuesday, base metals producers retreated with HudBay Minerals Inc. and First Quantum Minerals Ltd. dropping at least 4.1 percent. Copper extended a retreat from a two-month high while nickel fell the most in eight weeks on the London Metal Exchange as industrial metals declined.

Thompson Creek Metals Co. jumped 6.7 percent to the highest level in two months, after the mining company agreed to sell itself for C$175.8 million to Centerra Gold Inc. in a share deal.