April 25, 2011 / 9:30 PM / in 6 years

CANADA STOCKS-TSX falls on Barrick Gold's copper deal

 * TSX falls 0.46 percent to 13,907.32
 * Barrick to buy Equinox for more than C$7 billion
 * Barrick falls to 3-week low, top heavyweight decliner
 * 6 of index’s 10 sectors weaker, materials falls 1.43 pct  (Updates to close)
 By Ka Yan Ng
 TORONTO, April 25 (Reuters) - Toronto’s main stock index ended a three-day upswing on Monday as investors dumped Barrick Gold Corp (ABX.TO) after it struck an all-cash deal to buy an Australian copper miner.
 Barrick (ABX.TO), the world’s largest gold miner, plunged more than 6 percent to C$49.44, its lowest point in more than three weeks, after it said it will to buy Equinox Minerals EQN.TO EQN.AX for about C$7.3 billion. That bid topped an offer from China’s Minmetals Resources (1208.HK) and was seen as a big bet on soaring copper demand.
 Barrick finished down 6.73 percent at C$49.50, suggesting not all investors back its move to diversify. The gold miner was the index’s top decliner, and had six times more drag on the index than Canadian Natural Resources (CNQ.TO), the next heaviest loser.
 Equinox surged 12 percent early on, then pared gains to finish up 11.6 percent at C$8.37.
 The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE ended down 64.70 points, or 0.46 percent, at 13,907.32. Six of its 10 main groups were weaker, led by a 1.43 percent drop in the materials group, which fell on the steep selloff in gold-mining issues.
 “Barrick explains the move down,” said Francis Campeau, broker at MF Global Canada in Montreal. “I‘m wondering if the gold players are going to steer away from Barrick to get to a more gold play.”
 But almost all gold-mining issues came under pressure on Monday, driving down the index’s gold subsector by 2.55 percent. The base-metals subsector, however, was up 1.94 percent.
 “Barrick is off because it’s taking up a lot of its cash,” said Gavin Graham, president of Graham Investment Strategy.
 “It’s obviously good news longer term for the Canadian market but short term the sell-off in Barrick is dragging things down.”
 Gold miners dropped even though spot gold hit a record high above $1,518 an ounce and silver moved closer to its 1980 record peak. [GOL/] Graham said that in addition to the Barrick deal, rising energy costs were weighing on the shares of precious metal miners.
 Other key decliners on Monday included Canadian Natural, down 1.2 percent at C$43.88, while Suncor Energy lost 0.67 percent to C$42.89.
 Bucking the trend, Bombardier’s (BBDb.TO) stock firmed 2.35 percent to C$6.96 after the Canadian plane and train maker said it had won a new order for three CRJ900 NextGen aircraft, bringing total firm orders for the CRJ900 to 265 so far.
 MF’s Campeau said the market’s spotlight was also on the heavy flow of corporate results slated for this week from both Canada and the United States.
 Canadian companies basking in the glow of soaring commodity prices are expected to deliver double-digit profit gains, though many investors enter the earnings season wary about rising costs. [ID:nN15285219]
 Precision Drilling (PD.TO), Canada’s largest oil and gas driller, Canadian National Railway (CNR.TO), and wireless provider and cable company Rogers Communications RCIb.TO are on deck for results on Tuesday.
 ($1=$0.95 Canadian)  (Reporting by Ka Yan Ng; editing by Peter Galloway)                                        

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