CANADA STOCKS-TSX drops as Potash Corp, gold shares fall

Wed Sep 11, 2013 11:52am EDT
 
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* TSX falls 51.32 points, or 0.40 percent, to 12,773.16
    * Eight of the 10 main index sectors decline
    * Potash Corp drops 3.6 percent, has biggest index impact
    * Bombardier higher after contract win

    By John Tilak and Rod Nickel
    TORONTO/WINNIPEG, Sept 11 (Reuters) - Canada's main stock
index declined on Wednesday as Potash Corp of Saskatchewan
 dropped after two days of gains and gold miners
declined on continued signals that a diplomatic solution to the
Syrian crisis was possible.
    Shares of Potash Corp and other producers of the crop
nutrient potash fell after strong advances in the two previous
sessions that were linked to optimism that Russian rival
Uralkali could change strategy.
    Reports circulated on Monday that billionaire Suleiman
Kerimov might sell his stake in Uralkali, leading to speculation
about a renewed partnership between Uralkali and Belarusian
potash producer Belaruskali that would support potash prices.
    But Uralkali said on Tuesday it had no plans to return to
the trade alliance with Belarus, and the world's biggest nickel
producer, Norilsk Nickel, said on Wednesday it had no
interest in Kerimov's stake. 
    Shares of Potash fell 3.6 percent and had the biggest
negative influence on the index.
    The market wanted to believe that the Russians and
Belarusians will reconcile "but that hasn't been proven just
yet," said Stan Wong, vice president and portfolio manager at
Macquarie Private Wealth. 
    "Shorter term, the drama that's played out in these two
countries is still going to keep fertilizer companies a bit
under water," said Wong, whose portfolio includes Potash.
    Over the long run. Potash and other fertilizer companies
will benefit from increasing grain consumption, especially in
emerging markets, Wong said.
    The Toronto Stock Exchange's S&P/TSX composite index
 was down 51.32 points, or 0.40 percent, at 12,773.16.
Eight of the 10 main sectors on the index were in the red.
    The materials sector, which has climbed since hitting a low
in June, dropped 1.8 percent and was the biggest decliner among
the major groups.
    In the materials group, gold-mining shares stumbled more
than 1 percent as bullion prices fell as optimism about a
diplomatic end to the Syrian crisis eroded gold's safe-haven
appeal. Goldcorp Inc lost 0.9 percent to C$27.91,
and Barrick Gold Corp shed 0.6 percent to C$18.95.
    Shares of energy producers were down 0.5 percent. Suncor
Energy Inc fell 0.3 percent to C$36.50, and Enbridge Inc
 lost 1.8 percent to C$42.42.
    A consortium led by Bombardier Inc won a $288
million contract from Azerbaijan Railways to deliver signaling
systems for an international corridor connecting Asia and
Europe. Shares of Bombardier climbed 0.8 percent to C$4.99.