Canadian Stocks Little Changed as Banks Gain, Commodities Drop

Canadian stocks were little changed, after rising to a one-week high yesterday, as gains among bank shares offset losses in raw-material producers amid concern about a U.S. military strike on Syria.

Toronto-Dominion Bank, Canada's second-largest lender, added 0.4 percent. Air Canada, the nation's largest airline, climbed 3.6 percent for a fourth day of gains. Niko Resources Ltd. lost 9.5 percent as crude slipped for the third time in four days. Torex Gold Resources Inc. and B2Gold Corp. retreated more than 1.4 percent as the U.S. faced opposition from Russia on an attack against Syria, eroding demand for gold as a haven. Silvercorp Metals Inc. sank 5 percent as silver prices fell.

The Standard & Poor's/TSX Composite Index (SPTSX) rose 3.21 points, or less than 0.1 percent, to 12,743.71 at 2:27 p.m. in Toronto. The benchmark Canadian equity gauge has risen 2.5 percent this year. Trading volume was 4.3 percent higher than the 30-day average at this time of the day.

"The oil price and gold price are reflecting geopolitical risk," said Jeffrey Burchell, a fund manager with Aston Hill Financial Inc., in a telephone interview from Toronto. His firm manages about C$8 billion ($7.6 billion). "People are getting settled in and trying to figure out what to do next."

Gold and silver futures fell the most in eight weeks. Torex Gold sank 5.6 percent to C$1.53 and B2Gold dropped 1.4 percent to C$2.80. Silvercorp Metals fell 5 percent to C$3.82.

The S&P/TSX Materials Index lost 1 percent as 45 of 55 members retreated. The group has plunged 25 percent this year, the worst performer among 10 industries in the S&P/TSX.

Chemical Weapons

The international community's credibility is on the line after Syria used chemical weapons against civilians, U.S. President Barack Obama said at a news conference today in Stockholm, repeating a claim the Syrian government has denied.

Canada's trade deficit widened to C$931 million in July from C$460 million in June, Statistics Canada said. The gap exceeded the most pessimistic forecast in a Bloomberg survey of economists. Exports fell 0.6 percent to C$39.2 billion on a 7.3 percent drop in shipments of metal and non-mineral products.

"The hearty gain in energy exports that the street was expecting didn't quite materialize," Emanuella Enenajor, an economist with CIBC World Markets Inc., said in a note to clients today. "Overall a disappointing figure."

The Bank of Canada today kept its main interest rate unchanged at 1 percent for the 24th meeting. Policy makers reiterated that current monetary policy remains appropriate as an expected rotation of demand to exports and investment is being delayed.

Niko Resources declined 9.5 percent to C$4.29 and Bankers Petroleum Ltd. slipped 1.5 percent to C$3.56. Crude for October delivery lost 1.4 percent to $107.01 a barrel in New York.

Air Canada (AC/B), the nation's largest airline, rose 3.6 percent to C$2.92. The stock has jumped 9.8 percent in the past four sessions, the longest winning streak since June.