CANADA STOCKS-Barrick dive pushes TSX into red for day and week

Fri Nov 1, 2013 5:10pm EDT

* TSX ends down 23.80 points, or 0.18 percent, at 13,337.46
    * Falls 0.5 pct on week after three weeks of big gains
    * Barrick again weighs after announcing big stock sale


    By Alastair Sharp
    TORONTO, Nov 1 (Reuters) - Canada's main stock index slipped
on Friday, hit by a plunge in Barrick Gold Corp shares
as the massive stock offering announced by the world's largest
gold miner the day before got a cold shoulder from the market.
    While banks and industrial stocks rose, Barrick's 7.7
percent fall to C$18.72 and smaller declines for a string of
other gold miners pushed the index to a weekly decline after
three weeks of gains.
    Barrick said on Thursday it is issuing more than $3 billion
in stock to help pay down debt. 
    "I gather that it has been a very tough issue to sell out
there, from what I've heard," said Michael Sprung, president at
Sprung Investment Management Inc, who holds Barrick stock and
declined to buy into the new issue.
    Barrick had fallen almost 6 percent a day earlier after
saying it would halt development of its Pascua-Lama mine in
South America indefinitely, a surprise reversal on a project
that has already cost it more than $5 billion. 
    Among other gold miners, Goldcorp Inc lost 4.6
percent to C$25.34 and Yamana Gold Inc gave up 6.2
percent to C$9.70. Kinross Gold Corp fell 5.7 percent to
C$5.
    "It (Barrick) certainly casts a pall on what investors might
perceive as the environment for investing in that area right
now," Sprung said.
    The sharpest weekly fall in the price of bullion in seven
weeks added to the miners' woes. 
    The Toronto Stock Exchange's S&P/TSX composite index
 ended down 23.80 points, or 0.18 percent, at
13,337.46. The index lost 0.47 percent on the week, ending three
straight weeks of solid gains that took it to two-year highs.
    The index rose sharply in October, outperforming U.S.
indexes on the month after lagging Wall Street gains this year
because of the poor performance of resource-based companies that
make up a large chunk of the Canadian market.
    Signs of global economic recovery are likely to boost
Canada's mining and energy companies, while investors have been
emboldened by suggestions by the U.S. and Canadian central banks
that stimulative monetary policy will remain in place for a
while yet. 
    Domestic and Chinese manufacturing data both showed growth
in October. The pace of growth in Canadian factories hit its
strongest level in 2-1/2 years, while China's numbers backed the
country's aim of sustainable growth. 
 
    "In theory, if we are seeing greater stability out of China
we should see more stable demand for commodities and perhaps a
slight pickup in commodity prices," said Philip Petursson from
the portfolio advisory group at Manulife Asset Management.
    But he said a growing supply of copper, and Canadian miners'
focus on lowering costs, could limit any climb in stocks.
    Canadian National Railways Co gained 1.1 percent to
C$115.86, a day after it reached a tentative labor contract with
the Teamsters union after weeks of negotiations. 
    Construction and engineering company SNC-Lavalin Group Inc
 gained 1.6 percent to C$44.52 despite reporting a
quarterly loss as cost overruns hurt. The company had slashed
its 2013 outlook in mid-October. 
    Banks were among the most influential gainers, with Royal
Bank of Canada up 0.6 percent at C$70.41 and Bank of
Nova Scotia gaining 0.5 percent to C$63.70. 
    Manulife's Petursson said record highs reached by bank
stocks have made them appear expensive, given the amount of debt
Canadians are looking to pay down. 
    "It's difficult to justify their valuation, especially in
light of the consumer debt situation, which could be a bit of a
drag for the banks going forward," he said.
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