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Tags: canada | stocks | commodity

Canada Stocks Down for 5th Day as Commodity Shares Fall

Tuesday, 08 May 2012 04:08 PM EDT

Canadian stocks fell for a fifth day after material and energy producers declined as Greece’s political leaders struggled to form a government, fueling concern that austerity efforts in Europe will be derailed.

Barrick Gold Corp., the world’s largest producer of the metal, lost 2.5 percent. Goldcorp Inc., the world’s second- biggest producer of the metal, decreased 3.4 percent as the U.S. dollar strengthened. Teck Resources Ltd., the country’s biggest base metals producer, sank 4.2 percent. Canadian Natural Resources Ltd., the country’s third-biggest energy company, declined 2.8 percent.

The Standard & Poor’s/TSX Composite Index decreased 186.98 points, or 1.6 percent, to 11,673.68 at 11:45 a.m. in Toronto. The gauge dropped to its lowest level since Dec. 19 on a closing basis.

“The uncertainty in Europe has reared its ugly head,” David Cockfield, a managing director at Northland Wealth Management in Toronto, said in a telephone interview. The firm oversees about C$200 million ($200 million). “It will continue to upset markets until we get a clearer picture of just what the European Union plans to do.”

Canadian stocks retreated last week after two straight weekly gains as Spain entered a recession, a U.S. industry report showed employers added fewer jobs than forecast last month and commodity prices dropped. Energy and mining shares account for 44 percent of Canadian stocks by market value, compared with 20 percent in the U.S.

Gold Tumbles

Materials companies fell today with metals as gold tumbled below $1,600 an ounce for the first time since January after Alexis Tsipras, the head of the Greek Syriza party, received a mandate to form a government, boosting worries over austerity. Tsipras has said he will seek to form a coalition with other parties that favor reversing a 130 billion-euro bailout.

The U.S. dollar gained, lowering demand for gold as an alternative for investors and sending the S&P/TSX Gold Index to its lowest point since May 2009.

Barrick Gold lost 2.5 percent to C$36.73. Goldcorp decreased 3.4 percent to C$34.71. Eldorado Gold Corp., a Vancouver-based mining company, declined 6.8 percent to C$11.87.

Copper fell the most in almost five weeks on concern over the elections in Greece and France. Teck Resources sank 4.2 percent to C$32.91. Ivanhoe Mines Ltd., Rio Tinto Group’s partner in the Oyu Tolgoi Mongolian gold and copper mine, dropped 4 percent to C$9.94.

Oil fell for a fifth day as Saudi Arabian Oil Minister Ali al-Naimi said prices are too high and the euro weakened against the dollar.

Canadian Natural Resources, the country’s third-biggest energy company, declined 2.8 percent to C$30.74. Suncor Energy Inc., Canada’s largest oil and gas producer, fell 2.2 percent to C$29.57. Nexen Inc. dropped 3.7 percent to C$16.62.

© Copyright 2023 Bloomberg News. All rights reserved.

Tuesday, 08 May 2012 04:08 PM
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