STOCK MARKETS — Dog days come early to Toronto

The Toronto Stock Exchange finished the report period ended July 2 fractionally lower, following a week of light trading and sluggish price moves. The TSE 300 composite index was down 8.09 points to 5,061.46, a loss of less than 0.2%. Resource stocks, except for oil and gas producers, were generally lower.

The Canadian dollar was slightly lower against the U.S. dollar, giving up 20 basis points to close at US73.55 cents. Although it lost some of the ground it gained against the European currencies the week before, the Looney continued to strengthen against the Japanese yen.

The gold price fell another $1.50 over the report period, reaching US$382.50 per oz. on the morning of July 3, having dipped as low as US$380.60 on the London bullion market July 1. Platinum, heavily oversold last week, was up $1.60 to US$391.75 per oz. Silver lost another 1 cents to finish the period at US$5.14 per oz.

The gold index had a miserable week, falling 238.28 points to 11,131.10 for a net loss of 2.1%. TVX Gold was the most active on the sub-index, falling 80 cents to close at $10.05. Bema Gold was down 60 cents at $5.15, and Greenstone Resources fell 20 cents to $15.80. Actively traded Barrick Gold was unchanged at $37.55, and Teck B added 25 cents to close at $28.

Placer Dome was $1 lower at $32.90, having announced that it would write down US$40 million against its second-quarter earnings as a provision for possible losses from the Marcopper tailings spill.

Base metals saw better days over the report period, with copper bouncing back 8 cents to close at US91 cents per lb. The market appeared to be recovering from the previous week’s price crash as copper consumers sensed a buying opportunity. Copper futures prices, which had been in backwardation for months, have now flattened out and are similar to spot prices. Nickel, which had caught a chill from the copper market, was up 10 cents to US$3.47 per lb., and lead and zinc both added 1 cents. Tin, which had quiet sailing through the copper troubles, was up 2 cents on the week to US$2.85 per lb.

The TSE metals and minerals sub-index fell 41.13 points, or 0.8%, closing at 5,092.30 on July 2. Investors appeared to be thinking that the resource cycle is topping, and were retreating from the resource stocks. Inco was down 65 cents to close at $43.70, Noranda lost 80 cents to finish at $27.55, Cominco fell 50 cents to finish at $29.50, and Aur Resources slid 75 cents to $9.45.

Cameco added 60 cents for a close of $63.80. Falconbridge, Rio Algom, and Inmet all showed small gains.

Diamond Fields Resources was 25 cents lower at $38.75. The company, along with Inco, is still facing a lawsuit from Exdiam, which claims ownership of Diamond Fields’ stock.

Another Friedland vehicle, Indochina Goldfields, saw 5.5 million shares trade — the highest volume among the TSE’s mining stocks — but fell $2.55 to close at $11.20. Its initial public offering was priced at $15. Other heavily traded stocks with southeast Asian interests were Bre-X Minerals, off $1.35 to $22.15, and affiliate Bresea Resources, which was down 50 cents at $12.85.

Nevsun Resources had a volume of 1.7 million shares and was 15 cents higher at $10.25. The company announced results from 16 drill holes at its 90%-owned Tabakoto gold project in western Mali. The intersections had grades up to 4.61 oz. per ton, although true thicknesses had not been determined.

Also among the heavily traded TSE juniors were Arequipa Resources, which fell $4.60 to $17, and Dayton Mining, up 10 cents to $8.05.

The largest moves in Toronto-listed juniors were made by Minorca Resources, down $1.10 to $2.55, and Manson Creek Resources, off 30 cents to 70 cents. On the Montreal exchange, Loubel Explorations lost 28 cents to close at 75 cents.