Thu, March 01, 2012
Business > Markets

Canadian stock market lower on depressed gold stocks

2012-02-29 23:58:38 GMT2012-03-01 07:58:38(Beijing Time)  Xinhua English

TORONTO, Feb. 29 (Xinhua) -- The Canadian stock market was down on Wednesday as bullion prices and gold stocks went down amid further signs of increasing economic growth in the United States.

The S&P/TSX composite index was off 96.46 points, or 0.76 percent, at 12,644.01 while the S&P/TSX Venture Composite Index dipped 21.66 points, or 1.28 percent, at 1,671.53.

The Canadian dollar rose 0.58 U.S. cents to 101.06 U.S. cents after earlier hitting a month-high of 101.29 U.S. cents. Appetite for riskier currencies such as the loonie was supported by a move by the European Central Bank to make 529.5 billion euros in low- interest loans to banks, the second round of a massive credit infusion.

The first offer of the three-year, low-interest credit to banks was on Dec. 21. Banks used some of the money from the first round of loans to buy government bonds, which in turn lowered borrowing costs for hard-pressed governments.

Signs of increasing economic growth in the U.S have pushed the gold price lower. The U.S. Commerce Department said that the economy grew at a slightly faster pace in the final three months of last year. It expanded at a three percent annual rate in the fourth quarter, the fastest pace since the spring of 2010. It exceeded the previous estimate of 2.8 percent and it was better than the third quarter's 1.8 percent growth rate.

The gold sector on the Canadian stock market fell 1.45 percent as losses in gold price amounted to almost 5 percent to 1,773.90 U. S. dollars an ounce. Goldcorp Inc. declined 3.62 percent to 47.97 Canadian dollars per share while Barrick Gold Corp. lost 3.88 percent to 47.34 Canadian dollars.

The energy sector lost 0.68 percent after data showed that U.S. crude and oil product inventories were surprisingly up last week. The American Petroleum Institute said late Tuesday that crude inventories rose 521,000 barrels.

Crude oil price ends February with almost 12 percent up in February, primarily over worries about Iran's nuclear program and the possibility of supply disruptions. Markets have been worried that the sharply higher crude prices could strain the U.S. economic recovery and worsen a recession in Europe.

The metals and mining sector was down 1.01 percent as copper prices were lower with the March contract down 1.53 percent to 3. 86 U.S. dollars a pound. Signs of an improving U.S. economy have boosted copper prices almost four percent up during February.

On the currency front, one U.S. dollar was buying 0.9893 Canadian dollars at 5 p.m. local time (22:00 GMT) on Wednesday, compared with one U.S. dollar purchasing 0.9950 Canadian dollars on Tuesday.

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