TORONTO (Reuters) - Canada’s main stock index fell on Thursday as Goldcorp Inc (G.TO) and other gold miners tumbled after reporting disappointing quarterly results and being hit by a lower bullion price fueled by positive U.S. economic data.
Goldcorp shares tumbled nearly 13.3 percent to C$21.90 after the company’s results fell short of market expectations. It had, by far, the biggest negative influence on the market.
Bullish comments about the U.S. economy on Wednesday from the U.S. Federal Reserve and data showing that U.S. gross domestic product grew at faster-than-expected rate in the third quarter weighed on bullion. Gold prices tend to drop on upbeat economic sentiment as the commodity loses its appeal as a safe-haven asset.
The Toronto stock market’s benchmark TSX index has been volatile in recent weeks and is set to record a sharp decline this month.
“Our view is that Canada will be underperforming the S&P 500 over the near term,” said Diana Avigdor, portfolio manager and head of trading at Barometer Capital Management.
She is bearish on the Canadian market and is not positive on the commodity sectors.
“We don’t want to stand in front of the speeding train,” Avigdor said. “Why do you want to buy a sector that’s relatively weak?”
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed down 68.88 points, or 0.47 percent, at 14,458.69. Six of the 10 main sectors on the index were higher.
Shares of energy producers dropped 1.2 percent, reflecting a decline in the price of oil. In the group, Canadian Natural Resources Ltd (CNQ.TO) gave back 1.1 percent to C$38.24, while Suncor Energy Inc (SU.TO), which reported quarterly results late on Wednesday, climbed slightly to C$39.
Gold miners dived 7.7 percent. Yamana Gold Inc (YRI.TO) gave back 17 percent after posting a hefty third-quarter net loss, while Agnico Eagle Mines (AEM.TO) lost nearly 12 percent after reporting adjusted earnings that missed expectations. But those miners reported results late on Wednesday.
Barrick Gold Corp (ABX.TO) slumped with the price of bullion despite unveiling stronger-than-expected third-quarter earnings on Wednesday. The stock was down 4.1 percent at C$13.75.
“It’s pretty grim,” said Dundee Capital Markets senior mining analyst Josh Wolfson about the gold mining sector selloff. “The response in the market reflects increasing financial concerns about the sector at current gold prices.”
Editing by Peter Galloway and Jonathan Oatis