Canada Stocks Fall for Third Straight Day Amid Gold Price Slump

  • Raw-materials producers post biggest decline in three years
  • Bank of Montreal retreats after restating capital ratios

Canadian stocks fell the most in three weeks, as plunging gold prices dragged raw-materials producers lower, while the Bank of Montreal was forced to restate some financial data.

The S&P/TSX Composite Index sank 1.1 percent to 14,520.92 at 4 p.m. in Toronto, declining for a third session. The S&P/TSX is still up almost 12 percent this year, making it the third-best performing developed market equity index in the world behind New Zealand and the U.K.

Canadian stock valuations touched the highest level in 14 years Friday and remain more expensive than their U.S. peers, with the S&P/TSX carrying a price-to-earnings ratio of 23.2 compared with 20.2 for the the S&P 500 Index, according to data compiled by Bloomberg.

Barrick Gold Corp., the world’s largest gold producer, slumped 10 percent as raw-materials producers tumbled 6.7 percent, the worst one-day slide in three years. The gauge has retreated 9.8 percent amid a four-day drop. Gold fell below $1,300 an ounce for the first time in more than three months as the Federal Reserve appears on track to raise interest rates in December. Silver Standard Resources Inc. of Vancouver sank 8.7 percent as silver prices also plunged.

Goldcorp Inc. lost 8.1 percent to the lowest level since March, capping a third day of losses. The shares have erased 13 percent of their value during this stretch after the Vancouver company shut down one of its biggest mines amid a labor protest.

Raw-materials and energy remain the top-performing industries in Canada this year, fueling a rebound in the wider gauge. The S&P/TSX Materials Index is still up 36 percent and set to halt its longest yearly losing streak since 1988. Energy producers are second with a 23 percent gain.

Meanwhile, Bank of Montreal tumbled 1.8 percent, its biggest drop in three months. The nation’s fourth-largest lender restated its regulatory capital ratios for the first three quarters of the year, a move akin to wiping out C$1.3 billion ($1 billion) in excess capital, according to a research note from Canaccord Genuity Group Inc.

Genworth MI Canada Inc., a residential mortgage insurer, sank a record 8.7 percent to lead declines among mortgage-related companies in Canada amid concern new measures by the federal government to cool the housing market will hurt their businesses. Genworth said more than a third of insured mortgage borrowers would struggle to meet new standards introduced Monday. Real-estate stocks lost 1.5 percent as a group.

Intact Financial Corp. lost 1 percent, the biggest slide in almost three weeks, after the insurer reported a third-quarter catastrophe pretax loss estimate of C$170 million. Intact blamed the loss on severe weather conditions during the summer months including hail, wind and rain that affected communities across Canada.

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