TORONTO (Reuters) - Canada’s main stock market eased on Wednesday, led by a decline in Barrick Gold Corp (ABX.TO), the world’s largest gold producer, after the release of disappointing earnings from its African subsidiary.
African Barrick Gold Plc ABGL.L forecast production would shrink for a fifth straight year and said it would focus on cutting soaring costs after talks over a possible takeover of the company collapsed in January. Its shares were off more than 11 percent.
That sent Barrick, which owns a majority stake in the company, 2.6 percent lower to C$31.72. The gold miners as a whole were down 1.7 percent.
“We do think the golds are deeply oversold at this point, but the news that keeps coming out from the companies really doesn’t inspire much confidence,” said Elvis Picardo, strategist and vice president of research at Global Securities in Vancouver.
A slew of gold producers is due to report quarterly earnings, with Agnico Eagle Mines Ltd (AEM.TO) and Kinross Gold Corp (K.TO) later on Wednesday and Barrick Gold and Goldcorp Inc (G.TO) on Thursday.
The drop in gold stocks more than offset a 2.1 percent rise in the shares of Talisman Energy Inc TLM.TO, which reported a quarterly profit on gains from asset sales.
“We continue to have a mixed earnings picture,” said Fred Ketchen, director of equity trading at ScotiaMcLeod.
A 2.3 percent drop in Thomson Reuters Corp (TRI.TO) shares also weighed on the index after its revenue forecast for 2013 failed to impress analysts, although quarterly operating profit grew 2 percent due to cost cutting. The stock ended at C$30.02.
Still, of the nearly 20 percent of TSX stocks that have reported earnings for the quarter, 64 percent have met or beat expectations, according to Thomson Reuters StarMine data.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE ended down 13.74 points, or 0.11 percent, at 12,775.28.
Five of the 10 main sectors on the index were in negative territory.
Picardo noted the index was having trouble breaking through the 12,800 level.
Part of the problem is heightened concern about the potential for the Canadian economy, especially given the soft economic reports of last Friday, including disappointing jobs and housing data.
“People are very confident with the sector. It’s very low risk,” Ketchen said.
The stable earnings and dividend payouts are also drawing investors to financials, he added.
Reporting by Claire Sibonney.; Additional reporting by John Tilak. Editing by Andre Grenon