April 25, 2011 / 9:30 PM / 7 years ago

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
 "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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