STOCK MARKETS — Markets buoyant but mines take dive

With average daily volumes in excess of 100 million shares, and the banking, real estate, construction and industrial sectors leading the charge, the Toronto Stock Exchange’s TSE 300 composite index rose 99.39 points to 5,664.47 over the report period ended Nov. 5. In the process, the TSE set four daily records, but the gold and base metal issues, which drove the market earlier in the year, slid still further.

The TSE’s bull market was fed by strength in the Canadian dollar, which rose steadily on international currency markets this week. In trading at noon on Nov. 6, the Canadian dollar was at US75.15 cents, up 0.58 cents from a week before, and was higher against all the other major Western currencies.

The loony, which broke the US75 cents barrier on Nov. 5, is showing unusual resistance to interest rate cuts, which has led the market to believe that the Bank of Canada may shave its overnight loan rate, now at 3.5%, another quarter-point.

Gold prices suffered again last week on the London bullion markets, hurt, at least partly, by strength in the U.S. dollar relative to the yen and many European currencies. The yellow metal was off $2.40 to US$377.90 per oz. at the Nov. 6 morning fixing. Platinum, beaten badly in the previous week, fell $1.25 to US$379.25 per oz. Silver was also weaker, losing 4 cents to finish the trading period at US$4.79 per oz.

The gold and precious minerals sub-index continued its retreat, falling 145.28 points to 11,027.61 for a loss of 1.3%. Big guns Placer Dome, down 70 cents at $32.15, and Barrick Gold, down 75 cents at $34.50, dropped off, but not as drastically as such middle-tier producers as TVX Gold (down 50 cents at $9.70), Agnico-Eagle Mines (down $1.20 at $17.95), Golden Star (down $1 at $24.50) and Goldcorp (down 35 cents at $12.15).

The royalty companies were in better favor, with Franco-Nevada Mining up $1.50 to $58.50, a new high, and Euro-Nevada Mining 25 cents better at $39.70. Also higher were Rayrock Yellowknife at $7.60, up 35 cents, and Greenstone Resources, 85 cents better at $17.50.

Base metals continued to recover, with copper breaking US$2,000 three times in London Metal Exchange (LME) morning rings. The red metal finished the report period at US91 cents per lb., up 3 cents from a week before.

Undoubtedly, aluminum’s recovery, to US64 cents per lb., helped bump up the copper price, but an unusually large drawdown in LME stock levels also contributed. Zinc and lead were both higher as well, while both tin and nickel fell slightly.

The metals and minerals sub-index fell drastically this week, shedding 169.80 points to close at 5,041.88 on Nov. 5. Most active on the board, for the second week running, was Inmet Mining, which lost another 35 cents to close at $8 on a volume of 6 million shares.

Noranda fell 25 cents to $28.95, while stablemate Falconbridge fell $1.35 to a close of $29. Inco was $1.10 lower at $41.60, Rio Algom fell 45 cents to $27.65, and Cameco was off $4.75 to $56.15.

Bre-X Minerals was the most active stock in the junior exploration sector, and was $3.15 lower at $20.50 as jitters continued over the company’s land title at Busang in Indonesia. William Resources was 8 cents lower at $1.45.

The company has offered to take over Swedish mining firm Terra Mining at $33.25 per share, for a total offer of $147 million.

Meanwhile, Corriente Resources announced it was selecting drill targets at its Laurani property in northern Bolivia, and rose $2.75 to $6.85. Franc-Or Resources backed off from the levels it has been testing over the past two weeks, falling 70 cents to $3.40 as investors took profits. The company continues to release results of gold sampling at its Haute-Mana concession in French Guiana.