STOCK MARKETS — Toronto markets take slow slide in a slow week — Base metals follow broad market as golds hit new low

The June 25-30 trading period saw the Toronto Stock Exchange coast downhill in advance of the July 1 national holiday. Over three days of moderate trading and one day of light action, the TSE 300 composite index lost 53.22 points, or 0.8% of value, to close at 6,437.74. Only the financial services sector showed any signs of strength, as the real estate and industrial sub-groups joined the sad-sack forest products and mining stocks in the TSE’s basement.

The Canadian dollar added 91 basis points against the U.S. dollar over the same period, reaching US72.6 cents at noon on July 2. The Bank of Canada issued a surprise quarter-point rate hike (to 3.5%), giving currency markets a jolt and driving the Loony higher against the greenback and higher still against the European currencies and the yen.

Gold plunged $7.25 on the London bullion markets over the report period, bottoming out at US$331.45 per oz. on the July 2 morning fix. Two factors have brought the price to its lowest level since March 24, 1993 — central bank sales (and, more importantly, the fear of more central bank sales) continue to depress the market, and producers are reported to be selling heavily in the futures market. Platinum continued higher, adding $15 to finish at US$429 per oz.

The Toronto market responded to the metal’s tailspin by sending the gold and precious minerals index to a new 52-week low of 8,241.72 before letting the sub-group climb back to 8,306.18, for a net loss of 161.12 points.

Barrick Gold fell 40 cents to $30.05, Placer Dome was off 50 cents to $22.40, TVX Gold dropped 35 cents to $7.30, and Euro-Nevada Mining shed $1.30 to $42.50. Predictably, spot-seller Agnico-Eagle Mines was off 45 cents at $13.25, but hedger Cambior also fell, shedding 75 cents to close at $15.70.

Bucking the trend was Kinross Gold, which added 5 cents in heavy trading to close

at $6.15.

The London Metal Exchange went for a repeat of the previous week, with one bright spot in a lacklustre market: zinc added 4 cents to close on July 2 at US66 cents per lb. Nickel slid another 9 cents to US$3.09 and copper was 2 cents lower at $1.14 per lb. Lead and aluminum made fractional gains.

The TSE’s metals and minerals sub-group fell in tandem with the broad market, losing 47.55 points to close at 5,126.54 on June 30. Inco was the volume leader, with 2.4 million shares riding the tape. The big nickel miner fell 95 cents to close at $41.25.

Westmin Resources also traded heavily, picking up 15 cents to close at $6.60.

Diversified miner Teck, despite its membership in the gold sub-group, saw its B series shares move 20 cents higher at $27.95, whereas stablemate Cominco added 60 cents to close at $36.75. Cameco, which is facing a softer uranium market, was off 50 cents at $51.75.

The most actively traded issue among Toronto juniors was Crystallex, which rose another 25 cents to finish at $7. There has been much speculation that the company’s challenge to Placer Dome’s interest in the Las Cristinas project in Venezuela could prove successful, a sentiment echoed by newsletter writer Peter Grandich.

Montreal provided much more interesting activity among the juniors. Maude Lake Exploration was 20 cents higher at 45 cents on a light trading volume of 2,400 shares.

The Montreal market had its fair share of declining stocks as well, with Diabex Resources off 12 cents to 15 cents, Augyva Mining down 4 cents at 9 cents, and AFCAN Mining shedding 9 cents to close at 21 cents.