Bloomberg News

Canadian Stocks Fall as Gold Drops for Fifth Day, Oil Declines

December 28, 2011

Dec. 28 (Bloomberg) -- Canadian stocks fell for the first time in five days, led by precious-metals producers, as gold futures extended the longest losing streak since October 2009.

Barrick Gold Corp., the world’s largest gold producer, decreased 3.6 percent as the metal retreated for a fifth day. Suncor Energy Inc., Canada’s biggest oil and gas producer, lost 2.5 percent as crude futures slipped for the first time in seven days. Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, slid 3.6 percent after India said it may re-introduce fertilizer price controls.

The Standard & Poor’s/TSX Composite Index fell 198.26 points, or 1.7 percent, to 11,728.41.

“As a hiding place, it served its purpose,” Bob Decker, a money manager at Aurion Capital in Toronto, said of gold in a telephone interview. The firm oversees about C$5.5 billion ($5.4 billion). “As people look to the new year with a little more optimism with regard to the U.S. economy, maybe they’re taking profits in their winning trades.”

The S&P/TSX rallied 3.4 percent in the previous four sessions as stronger U.S. economic data boosted energy and bank shares. Canada’s benchmark stock index has slumped 13 percent this year and is set to trail the S&P 500 for the first year since 2003. Canadian markets were closed Dec. 26 and yesterday for the Christmas and Boxing Day holidays.

Indian Imports

Gold imports by India, the world’s largest consumer, may decrease as much as 50 percent this month from last year due to a weaker rupee, the Bombay Bullion Association said yesterday. China restricted spot and futures gold trading to the Shanghai Gold Exchange and the Shanghai Futures Exchange as part of efforts to crack down on illegal buying and selling of commodities, the People’s Bank of China said yesterday.

Gold dropped to the lowest settlement price since July and silver to the lowest since January. The S&P/TSX Gold Index tumbled to the lowest close since July 2010.

Barrick lost 3.6 percent to C$45.26. Goldcorp Inc., the world’s second-largest producer of the metal by market value, retreated 4.7 percent to C$43.56. Silver Wheaton Corp., Canada’s fifth-biggest precious-metals company by market value, sank 6.1 percent to C$28.37. NovaGold Resources Inc., which is developing gold and precious-metals mines, plunged 9.2 percent to C$8.14.

Energy stocks fell as oil futures dropped after settling at a six-week high yesterday. Suncor lost 2.5 percent to C$28.56. Canadian Natural Resources Ltd., the country’s second-largest energy company by market value, slipped 2.5 percent to C$36.84. Oil-sands developer BlackPearl Resources Inc. decreased 4.6 percent to C$4.16.

Copper Mining

Base-metals and coal producers fell a day after an index of U.S. home prices decreased more than most economists in a Bloomberg survey had forecast and the Federal Reserve Bank of Dallas’s gauge of regional manufacturing declined. Japanese industrial production retreated 2.6 percent in November from the previous month, three times the median estimate in a Bloomberg forecast, the country’s trade ministry said yesterday.

Teck Resources Ltd., Canada’s largest company in the industry, lost 3.1 percent to C$35.17. First Quantum Minerals Ltd., Canada’s second-biggest publicly traded copper producer, decreased 4.4 percent to C$18.71. SouthGobi Resources Ltd., which mines coal in Mongolia, slumped 7.2 percent to C$5.91, the lowest since December 2008.

Potash Corp. retreated 3.6 percent to C$41.90 after Srikant Jena, India’s junior fertilizer minister, said in an interview the country is seeking ways to reduce prices. Agrium Inc., a fertilizer producer and farm retailer, fell 2.7 percent to C$68.50, ending a six-day streak of gains.

Neo Material Technologies Inc., which makes rare-earths and zirconium products, tumbled 7.6 percent to C$7.15 after China indicated it will leave quotas for rare earths virtually unchanged in 2012. Rare Element Resources Ltd., which owns a project in Wyoming, sank 16 percent to C$3.30, the lowest since August 2010.

The S&P/TSX Financials Index dropped as all of its banks declined. Royal Bank of Canada, the country’s largest lender by assets, lost 0.9 percent to C$50.85. Canadian Imperial Bank of Commerce, the fifth-biggest lender in the country, slipped 1 percent to C$72.67. Manulife Financial Corp., North America’s fourth-largest insurer, decreased 1.4 percent to C$10.45.

--Editors: Joanna Ossinger, Jeff Sutherland

To contact the reporter on this story: Matt Walcoff in Toronto at mwalcoff1@bloomberg.net

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net


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