Canada Stocks Little Changed as Gold Shares Offset Banks Slump

(Bloomberg) -- Canadian stocks erased losses to end little changed, as gains by gold producers and health-care shares offset declines in banks after a report today showed the nation's trade deficit widened more than expected.

The S&P/TSX Composite Index rose 0.1 percent to 14,231.06 at 4 p.m. in Toronto, after earlier falling as much as 1 percent. The benchmark trails New Zealand as the world's top-performing developed market in 2016, according to data compiled by Bloomberg. 

Financial services and consumer discretionary shares were the biggest drags on the S&P/TSX on Wednesday, as investors assessed data that showed the trade deficit in Canada held near a record high in May as exports of machinery and metals declined, worse than economists' forecasts. The deficit follows an April figure revised higher to a record C$3.32 billion, according to Statistics Canada.

Toronto-Dominion Bank slid 2.1 percent, while auto-parts manufacturer Magna International Inc. lost 0.8 percent.

The S&P/TSX fluctuated after minutes from the Federal Reserve's last meeting showed officials left interest rates on hold in June due to heightened uncertainties in the U.S. jobs market threatening their outlook.

At their June 14-15 session, officials lowered their expectations for the number of times they'll increase rates this year, indicating they believed the economy's potential growth rate had dropped meaningfully, even before the U.K. referendum on June 23. Traders now see a 2 percent probability of an interest rate hike in September, according to data compiled by Bloomberg.

Canadian equities have swung between gains and losses since the Brexit vote in June as investors sought havens from the market volatility. Canadian government bond yields tumbled for a fifth day, touching the lowest level since February. Ten-year government bonds in the U.S., Australia, Japan, Germany, France and the U.K. sank to records. Gold jumped to the highest in two years.

Raw-materials producers increased 1.4 percent as gold prices climbed. Barrick Gold Corp. and Yamana Gold Inc. rose more than 2.7 percent.

Valeant Pharmaceuticals International Inc. surged 15 percent, the most since April, after Walgreens Boots Alliance Inc. said in a third-quarter earnings call it was satisfied with its relationship with Valeant and willing to help Valeant be more successful.

Centerra Gold Inc. sank 8 percent, the most since May, after agreeing to buy Thompson Creek Metals Co. in a stock deal valued at $1.1 billion. The move will help Centerra expand in North America and reduce its dependence on Central Asia.

Torstar Corp., publisher of Canada's biggest daily newspaper, retreated 4.8 percent for a second day of losses. David Holland, president and chief executive officer of Torstar, will step down this fall. The company hasn't named a replacement.

To contact the reporter on this story: Eric Lam in Toronto at elam87@bloomberg.net. To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Inyoung Hwang