* TSX falls 0.44 percent to 13,401.48
* Golds chief decliners, outweigh six advancing sectors
* Inmet jumps 6 pct on news of Lundin merger (Adds details, quotes)
By Ka Yan Ng
The materials group, down 2.09 percent and home to gold miners, was the chief sector pulling down the overall index.
The fall by gold miners offset strength from base metal miners that rallied on news of another multibillion-dollar merger in the sector.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE fell 58.73 points, or 0.44 percent, to finish at 13,401.48. Six of the index’s 10 main groups were higher, but were no match for the heavy losses in the materials sector.
Five gold miners were among the top 10 blue-chip heavyweight decliners. The gold subindex tumbled 2.9 percent.
Barrick lost 4.93 percent to close at C$46.88, while Goldcorp fell 3.44 percent to C$41.56. Kinross Gold (K.TO) declined 2.96 percent to C$17.05, Agnico-Eagle (AEM.TO) shed 2.4 percent to C$69.87 and Yamana Gold YRI.TO dropped 2.96 percent to C$11.82.
“The major (decliners) are the golds and the materials stocks. I think the materials stocks are partly paying the price for yesterday when they were up so strongly,” said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.
“The economic news today was not great. That was another strike against the sector ... that tends to be a pretty good proxy for sentiment towards global growth.”
Safe-haven buying of gold subsided after earlier successful European bond sales and a more positive economic outlook from U.S. Federal Reserve Chairman Ben Bernanke. [GOL/]
However, data on Thursday also showed weekly jobless claims in the United States jumped last week to their highest level since October, while food and energy costs lifted producer prices in December, pointing to headwinds for an economy that has shown fresh vigor. [ID:nN13271305]
A second blockbuster mining deal announced this week buoyed shares of base metals miners, despite softening prices in other commodities, and also suggested a strong year ahead for Canadian mergers and acquisitions. [ID:nN13273813] [ID:nN1342900]
Lundin Mining (LUN.TO) fell 1.9 percent to C$7.75, and Inmet Mining IMN.TO jumped 6.19 percent to C$79.39, after the two agreed to join forces to create a C$9 billion copper producer. The deal comes after U.S.-based iron ore and coal miner Cliffs Natural Resources (CLF.N) said it would buy Canada’s Consolidated Thompson Iron Mines CLM.TO for C$4.07 billion.
“Inmet now gets to participate in that mine in Congo and Lundin shareholders of course get to participate in Inmet’s better valuation,” said Schwartz.
“Had these two companies continued separately they wouldn’t be around for very much longer, so this is a necessary merger in our opinion.”
Even so, the deal provided for no premium on either company’s share price, and that could have muted any positive sentiment for the broader market.
Meanwhile, shares of Baffinland Iron Mines BIM.TO rose 0.66 percent to C$1.52 even as other iron ore juniors tumbled in the second day of trading after the Consolidated Thompson deal was announced. [ID:nN12234445]
Shares of Research In Motion RIM.TO rose as much as 4 percent to near an eight-month high after it reached a deal with India that appeared to protect its secure corporate email service, while details of a new touch and type smartphone model surfaced on a tech website. [ID:nN13294379]
$1=$0.99 Canadian Additional reporting by Claire Sibonney; editing by Jeffrey Hodgson and Rob Wilson