TORONTO (Reuters) - Canadian stocks fell for a fourth straight day on Thursday, led by energy and financial shares, as the European Central Bank followed the U.S. Federal Reserve in pouring cold water on expectations of further stimulus to boost the global economy.
After last week’s pledge by ECB President Mario Draghi to “do whatever it takes” to save the euro, expectations for strong action had been running high.
“The market was expecting something a bit more dramatic today,” said Craig Fehr, Canadian market strategist at Edward Jones in St. Louis, Missouri. “It has grown a little weary of the talk and is looking for action at this point.”
The Fed took a similar wait-and-see approach on Wednesday and did not announce any new stimulus measures to help revive a flagging U.S. recovery.
Canada’s heavily weighted energy sector fell 2 percent, hut by lower oil prices and by weak earnings results from Enbridge Inc (ENB.TO) and Petrominerales Ltd PMG.TO.
Enbridge slid 1.5 percent to C$39.90 after the pipeline operator reported a sharp fall in second-quarter profit due to losses on financial derivatives.
Petrominerales Ltd PMG.TO shares plummeted more than 18 percent to C$7.53 after the oil and gas producer’s second-quarter adjusted profit fell 66 percent on lower oil prices and sales.
Canadian financials slid 0.8 percent after the ECB news. Losses were led by top lenders Bank of Nova Scotia (BNS.TO), down 1.2 percent at C$51.36, Toronto-Dominion Bank (TD.TO), which fell 0.9 percent to C$77.99 and Bank of Montreal (BMO.TO), off 1.1 percent at C$56.82.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE finished down 112.03 points, or 1 percent, at 11,506.50. The index touched 11,475.43, the lowest level since July 25, shortly after Draghi’s remarks.
Draghi said any government bond buying would not come before September, and only if governments activated the euro zone’s bailout funds to join the ECB in buying bonds.
“The market will like that there’s not going to be a short-term freeze on banks,” said Rick Meslin, head of Canadian equities at UBS Securities Canada. “I don’t think the market is satisfied yet that the governments of Europe have gotten together with a cohesive plan.”
Canada’s influential materials sector, which includes miners, slid 0.8 percent. Losses were led by Potash Corp POT.TO, which fell 2.3 percent to C$42.91.
Kinross Gold Corp (K.TO) tumbled 5.6 percent to C$7.56 after the company, one of Canada’s largest gold miners, said on Wednesday it had replaced long-time CEO Tye Burt, who spearheaded the disappointing Red Back Mining acquisition. Kinross, which reports second-quarter results next week, named Paul Rollinson as the new chief executive.
“The difference between the gold bullion price increase and the lack of increase in the gold stocks is money that’s just not gone to shareholders - it’s gone into dead projects and poor investment decisions,” said Mike Newton, portfolio manager at Macquarie Private Wealth Inc.
On a positive note, First Quantum Minerals Ltd (FM.TO), jumped 6.1 percent to C$19.03 a day after the base metal miner said its second-quarter profit fell slightly, but revenues rose. On Thursday, the company announced plans to invest more than $4 billion in a new mine and expansion projects in Zambia.
“When other companies want to go ahead with something their stocks get drilled,” said Meslin. “If you look at the majors out there, this is the only independent that has legitimate production growth and people pay for that.”
Shares of New Gold Inc (NGD.TO) climbed 1.3 percent to C$10.13 after the miner on Wednesday reported a second-quarter profit that was in line with expectations.
In other company news, Rona Inc RON.TO shares rose 2.6 percent to C$13.95 a day after U.S. retailer Lowe’s Cos Inc (LOW.N) offered to buy its Canadian rival for C$1.8 billion ($1.8 billion).
Editing by Leslie Adler