CANADA STOCKS-TSX nears two-week low as Potash shares pounded

Tue Jul 30, 2013 5:13pm EDT
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* TSX falls 87.29 points, or 0.69 percent, to 12,581.75
    * Seven of 10 main sectors decline
    * Potash loses close to a sixth of its market value
    * Gold miners drop on weaker bullion price
    * TD stumbles after insurance loss warning

    By John Tilak
    TORONTO, July 30 (Reuters) - Canada's main stock index slid
on Tuesday to a near two-week low after the breakup of a
Russian-Belarusian potash joint venture sent Potash Corp
 shares tumbling as fears of a drop in the price of the
fertilizer ingredient gripped investors.
    The breakup by Russia's Uralkali  of its
venture with Belaruskali dismantled the world's largest potash
cartel, in a move that Uralkali expects to slash prices by 25
percent, heralding a reshaped industry and pummeling shares of
rival producers. 
    Potash, one of the world's largest fertilizer makers, lost
close to a sixth of its market value, dropping 16 percent to
C$32.66. With more than 103 million shares changing hands in the
stock's busiest trading since 2010, it was by far the most
active listing on the Toronto Stock Exchange.
    "Potash has already been badly hit this year by a weak
environment, but today we've seen a rout," said Michael Sprung,
president of Sprung Investment Management.
    "This is going to put further pressure" on Potash and other
fertilizer producers, he said, adding it could significantly
hurt their sales and profits.
    Agrium Inc, which like Potash is a member of the
North American Canpotex potash marketing joint venture, fell 5
percent to C$89.15 in its busiest trading since November 2012.  
    Investors also were cautious as they awaited a policy
statement from the U.S. Federal Reserve on Wednesday and the
all-important U.S. monthly jobs report later this week.
    Fed officials are likely to have a lively debate on how best
to prepare financial markets for a reduction of the U.S. central
bank's bond-buying program, but appear certain to wait for
further economic data before curtailing the stimulus.
    "I expect a likely confirmation that they will maintain a
low interest-rate environment," Sprung said. "To a great extent,
they're going to make statements that don't disrupt the
    The Toronto Stock Exchange's S&P/TSX composite index
 closed down 87.29 points, or 0.69 percent, at
12,581.75, after reaching 12,555.82, its lowest level since July
17. Seven of the 10 main sectors on the index declined.
    The materials sector index, which includes Potash Corp and
other miners, dropped 3.7 percent.
    Gold miners' shares declined as the price of bullion edged
lower, with investors nervous about monetary policy moves by the
    Goldcorp Inc lost almost 1 percent to C$29.12, and
Barrick Gold Corp fell 2.1 percent C$17.72.
    Financials, the index's most heavily weighted sector, were
down 0.7 percent.
    Toronto Dominion Bank declined 1.8 percent to
C$87.25, and Royal Bank of Canada slipped 0.5 percent to
    TD Bank's stock fell after the company warned it expects to
report a third-quarter loss in its insurance business due to
floods in Alberta and storms in the greater Toronto area,
joining a list of Canadian companies hurt by bad weather.
    In other company news, WestJet Airlines Ltd posted
a slightly higher-than-expected quarterly profit on Tuesday but
warned that a key measure of airline efficiency would decline in
the near term as it launches its Encore regional carrier. The
stock was little changed.