Canadian stocks fell for a second day, led by raw-materials and energy producers, on concern changes in China’s government policy may stunt growth in the world’s second-biggest economy.
Cenovus Energy Inc. (CVE) and Canadian Natural Resources (CNQ) Ltd. slipped at least 2.3 percent as the price of crude fell below $90 for the first time in more than two months. Agrium Inc. (AGU) dropped 2.1 percent after its chairman urged shareholders to vote against a board slate backed by an activist shareholder. Aurizon Mines Ltd. (ARZ) gained 4 percent after agreeing to sell itself to Hecla Mining Co. in a deal valued at C$796 million ($774 million).
The Standard & Poor’s/TSX Composite Index (SPTSX) fell 56.16 points, or 0.4 percent, to 12,716.96 at 12:56 p.m. in Toronto. Materials companies erased 1.8 percent, the most among the index’s 10 groups, and energy producers slid 0.8 percent. Trading volume was 9.1 percent below the 30-day average at this time of the day. The S&P/TSX has risen 2.3 percent this year.
“The market had been getting close to new highs and people are getting uncomfortable,” said Paul Harris, a fund manager with Avenue Investment Management in Toronto, which oversees about C$300 million. “India and China, those stock exchanges have come off a fair bit in the last little while. People have seen the market run up a lot in the last two to three months and were expecting a pullback.”
The Shanghai Stock Exchange Composite Index (SHCOMP) fell 3.7 percent today, the most since August 2011, after China’s cabinet last week ordered tighter mortgage rules to cool the property market. The Chinese government is seeking higher downpayments on second-home loans and stricter enforcement of sales-tax policy. Separately, data yesterday showed China’s service industries grew last month at the slowest pace since September.
Canadian Natural Resources slumped 3 percent to C$31.09 and Cenovus lost 2.3 percent to C$32. Crude for April delivery tumbled 1.1 percent to $89.69, the third straight day of declines.
Agrium lost C$2.25 to C$105.06 after Victor Zaleschuk, chairman of the Calgary-based company, sent a letter to shareholders asking them to re-elect the existing board at the seed and fertilizer supplier’s annual general meeting on April 9.
He called an opposing slate from New York-based hedge fund Jana Partners LLC “a Trojan horse tactic” designed to break up Agrium. Jana has pressed the company to spin off its farm-supply retail network.
Atlantic Power Corp. (ATP) plunged 15 percent to C$6.18, extending a 29 percent decline on Mar. 1 after the electric power company cut its annual dividend 65 percent to 40 Canadian cents a share. The stock touched its lowest level since November 2008.
“Even after a 29 percent share price decline, we believe it is too early for value investors to step in,” said Nelson Ng, analyst with RBC Capital Markets.
Aurizon added 18 Canadian cents to C$4.53. The cash-and- stock offer from U.S.-based Hecla Mining, which operates silver mines in Alaska and Idaho, comes after Aurizon rejected on Jan. 23 a C$780 million unsolicited bid from its largest shareholder, Alamos Gold Inc. Alamos climbed 6.6 percent to C$15.04.
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