Stock Market Bloodbath Kept at Bay in Canada With Gold Rally

(Bloomberg) -- Canadian stocks declined with global markets, as authorities struggled to keep the coronavirus from spreading more widely outside China. However, investors flocking to safe havens such as gold offset the sell-off in Canada’s stock market.

The S&P/TSX Composite Index fell 1.6% to 17,561.85 on Monday at 11:15 a.m. The move is the biggest since Aug. 14. Meanwhile, the MSCI AC Americas Index declined 2.8%. Within the Canadian benchmark, gold and silver miners were the only positive sector Monday, while health care and tech stocks were pummeled.

Barrick Gold provided the biggest boost to the index, advancing 3.3%, along with other gold miners such as Iamgold Corp., Centerra Gold Inc. and Eldorado Gold Corp. Earlier, Haywood recommended investors “load up” on junior gold mining companies as gold prices set a “new floor” at $1,600 amid the coronavirus fear, and may move toward $1,800 levels

Stocks

• Ballard Power Systems, which had about 32% of its 2018 revenue from China, had the largest drop among S&P/TSX stocks, fell 14%. Peer FuelCell Energy also tumbled after threatening to spike its license agreements with Korean partner Posco Energy.
• Enerflex Ltd fell 10%, after revenue for the fourth quarter ccame in below the average analyst estimate.
• Energy and industrial metal miners were among the losers due after metal and oil prices fell on coronavirus fear. First Quantum Minerals Ltd., MEG Energy Corp., Lundin Mining Corp. were among the biggest decliners
• Air Canada also fell about 7% amid virus fear
• MTY Food Group rose about 8% after reporting its fourth quarter results

Commodities

• Western Canada Select crude oil traded at a $16.40 discount to West Texas Intermediate prices
• Spot gold rose 1.9% to $1,674.97 an ounce

FX/Bonds

• The Canadian dollar fell 0.2% to C$1.3255 per U.S. dollar
• The 10-year government bond yield fell 6 basis points to 1.205%

Insights

• In the past year, the index had a similar or greater loss once
• This month, the index rose 1.2%
• The index advanced 9.5% in the past 52 weeks. The MSCI AC Americas Index gained 15% in the same period
• The Canada S&P/TSX is 2.5% below its 52-week high on Feb. 20, 2020 and 10% above its low on March 8, 2019
• The Canada S&P/TSX is down 1.8% in the past 5 days and fell 0.2% in the past 30 days

To contact the reporter on this story: Aoyon Ashraf in Toronto at aashraf7@bloomberg.net

To contact the editors responsible for this story: Brad Olesen at bolesen3@bloomberg.net, Divya Balji

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