Bloomberg News

Canadian Stocks Post Longest Slump Since 2008; Banks Fall

April 13, 2012

Canadian stocks fell, sending the main equity index to the longest weekly losing streak since 2008, as financial companies and commodity producers retreated after China reported the slowest growth in almost three years.

Toronto-Dominion Bank, the country’s second-largest lender, dropped 1.9 percent. Bank of Nova Scotia (BNS), Canada’s third-biggest lender by assets, declined 2.2 percent. Barrick Gold Corp. (ABX), the world’s largest producer of the metal, fell 1.2 percent. First Quantum Minerals Ltd. (FM), a copper producer that has surged for two weeks on takeover speculation, dropped 3.6 percent.

The Standard & Poor’s/TSX Composite Index (SPTSX) fell 174.26 points, or 1.4 percent, to 12,040.39 in Toronto. It slipped 0.5 percent since April 6, falling for the seventh straight week.

“There are worries about a soft landing for the Chinese economy,” Sebastian van Berkom, a money manager at Van Berkom & Associates in Montreal, said in a telephone interview. The firm oversees about C$1.8 billion ($1.8 billion). “Our market is very much influenced by commodities, whose performance is primarily determined by the outlook for Asia.”

The benchmark gauge rose 3.7 percent in the first quarter this year as economic data surpassed estimates and investors speculated that the euro area would contain its sovereign-debt crisis. The measure started this week with two days of declines following a weaker-than-forecast U.S. jobs report.

Financial Stocks Fall

Financial shares retreated as American consumer confidence dropped and the cost of insuring against a Spanish default reached a record high. Prime Minister Mariano Rajoy is struggling to prevent the nation from becoming the fourth euro- region member to need a bailout after prices for the country’s credit-default swaps rose to a record high rose 17 basis points to 498.

Toronto-Dominion Bank (TD) dropped 1.9 percent to C$81.95. Bank of Nova Scotia declined 2.2 percent to C$54.10. TD and Bank of Nova Scotia get 27 percent and 15 percent of their revenues from U.S. operations, according to Bloomberg data.

Materials companies in the S&P/TSX declined, driven by metals shares, as China said its gross domestic product in the first quarter expanded 8.1 percent from a year earlier, the slowest in almost three years. Before today, gold rose 3.1 percent this week on expectations that central banks may take more steps to boost their economies and concern that Europe’s debt crisis may worsen.

Barrick fell 1.2 percent to C$41.49. First Quantum Minerals dropped 3.6 percent to C$21.61. Silver Wheaton Corp. (SLW), the country’s third-biggest precious-metals company by market value, decreased 2.4 percent to C$31.13.

Energy Companies Drop

Energy companies in the S&P/TSX fell on concern over China and Saudi Arabia’s oil minister’s comment that the kingdom is determined to see lower prices. There’s no shortage of oil supply, and Saudi Arabia is working toward damping prices, Ali al-Naimi said today.

Suncor Energy Inc. (SU), Canada’s largest oil and gas producer, slipped 1.6 percent to C$30.45. Pacific Rubiales Energy Corp. (PRE), which explores for oil in Colombia, declined 1.6 percent to C$28.49. Canadian Natural Resources Ltd. (CNQ), the country’s third- largest energy company, fell 3.3 percent to C$31.91.

SNC-Lavalin Group Inc. (SNC), Canada’s biggest construction and engineering company, dropped 4.2 percent to C$38.40. The company’s Montreal headquarters were searched by the Royal Canadian Mounted Police. The investigation is related to “certain individuals who are not or are no longer employed by the company,” SNC-Lavalin said.

To contact the reporter on this story: Joseph Ciolli in New York at jciolli@bloomberg.net

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


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