Eastern markets weak across the board

Interest rate fears, coupled with weakness in the technology sector, pulled the Toronto Stock Exchange down over the report period Sept. 20-26. The TSE 300 composite index fell 435.93 points, to 10,478.59, a loss of 4% of its value over the five trading days.

The mining sub-groups had a softer landing than the market as a whole, with the metals and minerals index sliding 121.16 points to finish at 3,395.76 and the golds off only 42.68 points, for a close of 3,983.06.

It wasn’t quite the 1970s, but gold still got a little juice from turmoil in the financial markets. The London bullion fix on the morning of Sept. 27 saw a price of US$274.75 per oz., up US$3.65 from the previous week. Silver added 4 to finish the period at US$4.90.

The platinoids continued to glide slowly downward, as supply worries eased. Platinum was US$28.50 lower at US$565 per oz., and current glitz metal palladium slipped back US$5 to US$715.

Placer Dome was the most active of the Toronto golds, with a gain of 30 to finish at $13.85 on a volume of 5.4 million shares. Barrick Gold was also active, with 4 million shares changing hands, and closed 15 lower at $22.45.

Franco-Nevada Mining was down $1.05 at $14.35, as the market digested the news that its planned merger with Gold Fields has been derailed by the South African Department of Finance. Gold Fields took an even heavier hit, sliding more than 10% on the Nasdaq. The two companies don’t consider the merger to be a dead issue, as Franco-Nevada has said it is still in talks with Gold Fields. The cash-rich company also suggested the gold business might harbour other possible competitors for its US$700-million marriage dowry.

Among the other large Toronto gold listings, Kinross Gold traded 2.7 million shares and fell 13 to close at 80, TVX Gold was 24 lower at $2.51, and Cambior slid another 13 to finish the period at 63.

The base metals had a positive week, though bellwether copper, at US89 per lb., was unchanged after getting close to the psychologically important US$2,000-per-tonne level on Sept. 22. Nickel gained the most, rising US21 to US$4.05 per lb. and lead added US1 to finish at US23 per lb.

The Toronto nickel issues didn’t benefit from the positive activity in the metal markets. Inco was off $1.30 at $24.45 with 2.6 million shares moving, and Sherritt International was down 30 at $4.80. Strikebound Falconbridge was 85 lower, closing at $16.90.

Rio Algom traded heavily, with 3.5 million shares changing hands, but hope for a competing bid against the conditional $27.50 offer from Noranda appears to be fading, with Rio off 5 on the week to close at $28.45. Noranda, meanwhile, slid 15 to $14.15.

Two other issues sustained heavy losses during the same period: Cominco closed at $19.65, down $2.15, and Alcan closed at $43.45, down $1.35.