TSE builds up after profit-taking

Investors took profits after the Bank of Canada cut its principal lending rate on Nov. 27, leaving the Toronto Stock Exchange playing catch-up for the report period Nov. 28-Dec. 4.

The TSE 300 composite index fell fractionally, closing 12.47 points lower at 7,450.09, with most sectors showing a slow climb back after large losses on Nov. 28. The mining groups were the exception, though, with the metals and minerals index falling 141.89 points (or 3.5% of value) to 3,970.44 and the golds outpacing most of the rest of the market, adding 111.04 points (2.3%) to finish the period at 4,839.33.

The good news in the gold sector was a modest bump in bullion prices, coming after a Bank of England auction on Nov. 27 that many gold-watchers described as “disappointing.” Gold was up US$1.15 at US$275.75 per oz. in the Wednesday morning fix in London on Dec. 5, but it was far from the star performer among the precious metals. That title went to palladium, which surged US$37 to US$370 per oz., carrying platinum (which was up US$15 at US$453) along with it.

Kinross Gold was the most actively traded of the precious-metal miners, picking up 7 to close at $1.11. While the mid-tier producer still posted a loss at the end of the third quarter, its balance sheet is steadily becoming cleaner.

The big gold producers made respectable gains, with Barrick Gold rising 48 to finish at $23.75 and Placer Dome, 55 to finish at $16.95.

Base metal prices were mostly flat over the report period, even though the collapse of derivatives trader Enron, which operated a large metal-trading house, caused short-lived spikes in the base metal prices on both sides of the weekend. Copper was down US1 at US67 per lb., and zinc lost a penny to finish the period at US34.

Boliden was both heavily traded and volatile, closing 3 lower at 28. Altogether 28 million shares changed hands at prices between 18 and 39, in advance of a recapitalization of the company that includes a 20-to-1 consolidation. At presstime, new Boliden shares were trading at $5.65.

Teck Cominco B-series shares were also heavily traded, with 7.1 million moving. The shares closed at $11.10, down 50. Inco, with 5 million shares traded, finished $1.21 lower at $24.89.

Investors hardly responded at all to news coming out of the Noranda group. The parent company announced it was shutting down its Gaspe copper smelting operation in Murdochville, Que., but slid a modest 11 to $14.50. Falconbridge, meanwhile, delivered good exploration news from its Sudbury nickel operations, but still fell 59 to close at $15.86.

In contrast, the smaller miners did well on the week. Cameco picked up 69 to finish at $37.99, Sherritt International added 8 and closed at $4, and Aur Resources, which has made a 3-month climb to the top of the $2 range, was 7 better at $3.07 on a volume of more than 3 million.