Canada Stocks End Lower as Oil Rally Evaporates, Gold Retreats

  • Crude reverses gain as U.S. dollar climbs against major peers
  • Gold price extends October losses as Fed inches closer to hike

Friday's Canadian Market Movers

Canadian stocks ended the day lower, paring a weekly advance as energy producers fell from the highest level in more than a year to offset an advance in the nation’s lenders amid promising results from U.S. banks.

The S&P/TSX Composite Index slipped 0.4 percent to 14,584.99 at 4 p.m. in Toronto, erasing a climb of 0.6 percent. The index remained higher for the week, trimming its loss in October to 1 percent. It’s rallied 12 percent this year just behind New Zealand and the U.K., the three best performers among developed markets.

Eight of the 11 industries in the benchmark for Canadian equity fell Friday, led by a 1.5 percent drop in raw-materials producers, as the price of gold held near the lowest in four months. Barrick Gold Corp. and Goldcorp Inc. retreated at least 2.6 percent. Gold in New York has tumbled 4.9 percent in October as a first-half resurgence has fizzled out on increasing speculation the Federal Reserve will raise interest rates in December. Gold is less attractive in an environment of higher rates as it doesn’t pay a yield.

Energy producers lost 0.6 percent, reversing gains as an earlier increase in crude evaporated. Crude futures in New York lost 9 cents to close at $50.35 a barrel as the dollar rose as much as 0.4 percent against its peers, making commodities less attractive. The S&P/TSX Energy index remains 25 percent higher this year and near the highest level since June 2015.

Commodities producers have powered gains in Canada this year, fueling a rebound in the wider gauge after a weak 2015 when the benchmark equity index posted its worst loss since the 2008 financial crisis. The S&P/TSX Materials Index is up 36 percent and set to halt its longest yearly losing streak since 1988. Energy producers are second.

Canadian stock valuations remain 16 percent higher than their U.S. peers, with the S&P/TSX carrying a price-to-earnings ratio of 23.3 compared with 20.1 for the the S&P 500 Index, according to data compiled by Bloomberg.

Teck Resources Ltd. climbed 3.1 percent after Dundee Securities analyst Joseph Gallucci raised his rating for the diversified mining company to a buy from neutral. The analyst also boosted Teck’s price target to C$31.50. Teck is the best-performing stock in the S&P/TSX this year, up more than four-fold amid a rebound in commodities prices.

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