Bloomberg
Canada Stocks Fall as Gold, Copper Drop on Rising U.S. Dollar
June 03, 2010, 1:18 PM EDT
Canadian stocks fell, led by materials producers, as the U.S. dollar advanced for a fifth day and concern mounted that Chinese demand for industrial metals will diminish.
Barrick Gold Corp., the world’s largest gold-mining company, dropped 2.3 percent as the U.S. currency rallied following reports of expansion in U.S. service industries and a decline in initial jobless claims there. Teck Resources Ltd., Canada’s largest base-metals producer, lost 4.1 percent after the chiefs of the world’s two biggest copper-mining companies said business may suffer from China’s efforts to cool its economy.
The Standard & Poor’s/TSX Composite Index retreated 66.94 points, or 0.6 percent, to 11,713.73 at 12:39 p.m. in Toronto.
“China has been by far the largest force supporting the global economic recovery,” said Marcus Xu, director of equity investments at Genus Capital Management in Vancouver, which manages about C$1.6 billion ($1.54 billion). “If that softens up, that’s going to be having a very big impact on the future of the market.”
The S&P/TSX has tumbled 4.7 percent since April 26 as China has taken steps to rein in rising housing prices and investors speculated austerity measures in Europe may inhibit economic growth.
Copper retreated for a fourth day after chief executive officers of Freeport-McMoran Copper & Gold Inc. and Codelco said China’s plans to restrain its economy threaten to reduce demand for industrial metals.
Coal Demand
Teck, which also sells coal for use in Chinese steel mills, lost 4.1 percent to C$34.58. Demand for the fuel will be slowed by the Chinese government’s measures to cool the property market, Wu Chenghou, a senior advisor to the China Coal Transport and Distribution Association, said at an industry conference in Shanghai today.
Copper producer Quadra FNX Mining Ltd. slumped 5.7 percent to C$12.82. HudBay Minerals, which mines copper and zinc in Canada, retreated 3.8 percent to C$11.49
S&P/TSX gold companies fell for the first time this week as the U.S. dollar gained against the euro, yen, Canadian dollar and British pound, leading to lower gold prices.
The U.S. currency gained after the Institute for Supply Management’s index of non-manufacturing businesses in the U.S. held at 55.4 for a third month. Readings above 50 signal expansion. Also, first-time unemployment claims decreased by 10,000 to 453,000 last week, the U.S. Labor Department said.
Barrick dropped 2.3 percent to C$43.79. Kinross Gold Corp., Canada’s third-largest producer of the metal, declined 2.1 percent to C$17.72. Eldorado Gold Corp., which mines in Turkey and China, slumped 2.6 percent to C$17.58.
--Editors: Stephen Kleege, Joanna Ossinger
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