Toronto Stocks Shake Off Canada's Weak Trade Data

   By George Stahl 
 

Canadian stocks rose slightly Wednesday, shaking off news that the country's trade deficit in May came in wider than expected.

Over all, the S&P/TSX Composite Index fell 11.49 points, or 0.1%, to 14231.06. Decliners led advancers, 834 to 790. Trading volume was 453.5 million shares, compared with 418.1 million on Tuesday.

The blue chip S&P/TSX 60 Index dropped 0.27 points to 826.29.

Canada posted a trade deficit in May of 3.28 billion Canadian dollars ($2.52 billion), Statistics Canada said Wednesday. Economists had anticipated a C$2.7 billion deficit, according to Royal Bank of Canada. The numbers raised questions about policy makers' hopes for an export-led recovery.

Trade now looks set to be a sizable drag on economic activity in the second quarter, TD Securities economist David Tulk said, fueling expectations that real gross domestic product could fall by 0.9% in that period. However, Mr. Tulk said he still thinks the Bank of Canada will keep its key interest rate on hold when it issues a scheduled decision next week.

"While this print paints a worrying picture of the Canadian economy, there is sufficient uncertainty surrounding the shocks to activity over the middle of the year that the Bank of Canada is likely to remain cautiously on hold next week," Mr. Tulk wrote in a note.

Gold stocks rose as the precious metal reached a fresh two-year high on Wednesday amid deepening political and financial uncertainty in the U.K. and record-low bond yields, both of which added to a darkening global economic picture.

Among the gold miners rising Wednesday in Canada were Kirkland Lake Gold Inc., up 9.6%; Barrick Gold Corp, up 3.1%; and B2Gold Cop., up 7.6%.

A gold stock on the decline was Centerra Gold Inc., which fell 8% after agreeing to buy U.S.-based Thompson Creek Metals Co. for about C$176 million. Thompson Creek shares added 14.1%.

Copper prices, meanwhile, fell for a second straight day on Wednesday, amid growing stocks and indications that Chinese demand for the metal is down. Those concerns again weighed on shares of First Quantum Minerals Ltd., off 3%; HudBay Minerals Inc., down 2.8%; and Lundin Mining Corp., which fell 0.6%.

Other Canadian stocks on the move included Valeant Pharmaceuticals International Inc. The beaten-down stock rose nearly 15% as the drug maker benefited from a positive research report that noted the potential for several drug catalysts this month and encouraging comments from key partner Walgreens Boots Alliance Inc.

Shares of Advantage Oil & Gas Ltd. added 4.4% after the oil-and-gas company said it was on track to increase production to 58,330 barrels of oil equivalent a day. Advantage Oil said production growth exceeded expectations in the second quarter and total corporate cash costs were a record low.

Electrovaya Inc. shares gained 15.6% after the battery maker received a contract from an original equipment maker in the electric-mobility industry to provide battery modules starting next year.

--Kim Mackrael contributed to this article.

Write to George Stahl at [e-mail]

(END) Dow Jones Newswires

July 06, 2016 16:43 ET (20:43 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.