STOCK MARKET — Resource stocks on TSE fall into the pit — Market weakness aggravated by tighter bank rate

The Toronto Stock Exchange lost more ground over the trading period Nov.

19-25, as an increase in the Bank of Canada’s overnight loan rate snuffed out a modest rally. The TSE 300 composite index closed at 6,630.52 on Nov.

25, down 121.71 points, or 1.8%, from a week before.

Gold and base metal stocks were among the weakest market sectors, though all the natural-resource sub-groups went for a slide. Volumes were moderately heavy, with the heaviest trading coming on Nov. 25 when the Bank of Canada bumped its principal lending rate a quarter-point to 4%.

The Bank’s move came in response to the Canadian dollar’s weakness over the last month, which has largely been interpreted as a flight to U.S. dollars.

At noon on Nov. 26, the Loony was trading at US70.19, 48 basis points lower than a week before, and the Bank’s intervention had done little over the two days to shore up the dollar’s value. Other foreign currencies, with the exception of the pound, have also been sliding drastically against the greenback, and so continue to trade at similar exchange rates against the Canadian dollar.

Gold stocks on the TSE slumped again, pulled down by the collapsing price of the metal. At the London bullion fix on Nov. 26, the flags came down at US$297 per oz. — a $9.40 decline from the previous week. Platinum, which had been insulated from gold’s problems for much of the year, was $16 lower at US$380 per oz., and palladium, at US$207, was down $5. Silver, which has enjoyed a comeback, settled at US$5.24 per oz., 12 ahead of last week; it had been fixed as high as US$5.48 on Nov. 24.

The TSE gold and precious minerals sub-group closed 351.16 points lower at 6,020.97 on Nov. 25, a loss of 5.5% over the five trading days. Barrick Gold was the most actively traded, with 5.2 million shares across the tape; it closed $1.60 lower at $24.20. Placer Dome also traded heavily, and was off 60 at $17.75. Cambior took a $2.30 hit to close at $8.25, TVX Gold fell 60 to close at $4, and Kinross Gold was shaved 5, finishing at $4.65.

The metals and minerals sub-group fared better than the golds, but the big integrated mines still had a generally dismal week. Cominco suffered the most, falling $4.10 to close at $22.70. Noranda shed $1.35 to close at $23.80, while stablemate Falconbridge was down $1.25 at $18. Inco was $1.20 lower at $24.90, and Cameco bucked the trend, rising $1.35 to close at $52.85.

Boliden weighed in with a takeover bid for Westmin Resources, offering $5.40 for Westmin shares. Westmin was up $1.90 at $5.90 on speculation that another bidder could appear; Boliden fell $1 to close at $4.05.

On the junior boards, Montreal-listed Diabex Resources jumped 10 to close at 20 following the announcement that it had acquired two claim blocks in Douglas and Fallon twps., southeast of Timmins. The new claims cover areas of volcanic rocks believed to be stratigraphically equivalent to the rocks hosting the Cross Lake Minerals discovery in Sheraton Twp., about 25 km to the northeast.

Among Toronto juniors, Goldstake Explorations was up 14 to close at 38.

The company reported that it had completed refurbishing the crushing and treatment plant at its Klerksdorp gold project in South Africa, and that a consultant’s report on its Soreang property in western Java, Indonesia, had recommended additional trenching, channel sampling and drilling on the grounds that earlier drill holes had stopped short of mineralization.