Canada Stocks Little Changed, Cap Weekly Loss as Gold Declines

  • Greenback gains against peers as Fed officials debate hike
  • Gold prices fall to halt longest run of gains in six weeks

Canadian stocks ended Friday’s session little changed, with banks climbing to offset declines in raw-materials producers as gold prices fell amid a rallying dollar.

The S&P/TSX Composite Index slipped 0.1 percent to 14,687.46 at 4 p.m. in Toronto, as the benchmark lost 0.4 percent this week. Trading volume was 22 percent lower than the 30-day average.

Barrick Gold Corp. and Yamana Gold Inc. retreated at least 1.4 percent as raw-materials producers dropped 1.5 percent. Five of 10 industries in the S&P/TSX fell today. Gold futures lost 0.8 percent in New York, paring this week’s gain. Silver Wheaton Corp. sank 3.7 percent.

Banks climbed amid speculation that interest rates are going higher, with Royal Bank of Canada rising 1 percent to the highest close in in 16 months. Insurer Manulife Financial Corp. added 2.1 percent for its best gain in five weeks.

U.S. equities slipped in the week’s final session, as the dollar rallied the most in a month against major peers. Fed Bank of San Francisco President John Williams said Thursday it made sense to get back to a pace of gradual rate increases, preferably sooner rather than later. Williams is the latest Fed official this week to suggest rates could rise sooner, while July minutes released Wednesday showed policy makers remain split on the prospect. Traders have priced in a 51 percent chance of a rate hike in December.

Health-care stocks fell 0.6 percent, paring a weekly gain to 9.1 percent. Valeant Pharmaceuticals International Inc. ended the day down 0.6 percent, to finish with a 15 percent weekly gain after a tumultuous five days. T. Rowe Price Group Inc. yesterday filed a lawsuit against the drugmaker, accusing its executives of using deceptive practices to artificially inflate its revenue and profit.

A Valeant spokeswoman said the complaint repeats allegations and claims made in a suit filed last October that seeks class-action status, and the company “intends to defend itself.” Valeant also secured looser debt requirements, while two analysts upgraded their ratings for the stock this week.

Raw-materials producers have led the rally in Canadian equities in 2016, surging 58 percent as the top gainers among 10 industries in the S&P/TSX. It’s the best year-to-date performance for the category in at least 30 years, according to data compiled by Bloomberg. Energy producers have gained 22 percent in the same period.

That’s boosted the Canadian equity benchmark to a 13 percent jump in 2016, rebounding from a slump last year that was the worst for the S&P/TSX since the 2008 financial crisis. The rally has made Canadian stocks more expensive than their U.S. peers, with a price-earnings ratio of 23.4 for the S&P/TSX, about 14 percent higher than the S&P 500 Index.

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