Energy stocks lead TSX down

The Toronto Stock Exchange finished the 4-day trading period Oct. 4-7 down more than 4%, as prices of energy stocks went off the cliff. The composite index was down 468.69 points at 10,612.50, with oil and gas stocks leading the downward rush. North Sea crude oil prices fell about US$5 per barrel and West Texas crude was down about US$4.50 in the same period.

The base metal miners followed the broader market lower, with the Metals and Mining index down 10.82 points, or 3% at 351.78. The biggest news happened on the resumption of trading Oct. 11, when the two biggest companies on the index announced a friendly merger.

Falconbridge was up 11 at $30.82, on a volume of just under 8 million shares. That included an 83 run-up in the last two trading days of the period, during which 4.9 million shares changed hands — indicating some anticipation before the announcement that Inco would be making a $12.5-billion paper-and-cash bid for the company. Inco was down $2.73 at $51.90, suggesting there may have been speculation that it was a bidder for Falco, although Inco’s price declined in the first two trading days as trading volume peaked.

In fact, most nickel-sensitive stocks were lower during the period, which coincided with four days that saw US$260 shaved off the spot nickel price, which finished at US$13,095 per tonne (US$5.94 per lb.) on Oct. 7. Sherritt International closed at $10.36, off 68, FNX Mining was down 26 at $14.71, and LionOre Mining International fell 3 to $5.50.

In FNX’s case, the market was reacting to news that the company plans to take over Dynatec’s 25% share of the two companies’ Sudbury nickel projects. Dynatec gets a 26% shareholding in FNX, and is recast as a mining contractor at the Sudbury projects. Its shares were off 1 at $1.60.

Inco’s bid for its cross-town rival has probably shut the door on two possible buyers for nickel-laterite developer Canico, which was down 30 at $19.60. Diversified Brazilian miner Companhia Vale do Rio Doce has bid $17.50 per share for Canico, though the market is still looking for a white knight on the horizon.

Copper prices, in contrast to nickel, were up, with spot London metal at US$4,074 per tonne (US$1.85 per lb.). Yet all the copper-sensitives on the board fell: Aur Resources was down 32 at $8.77, First Quantum Minerals was off $1.88 at $28.42, Inmet Mining slid 55 to $20.65 and the most leveraged of all, Ivanhoe Mines, slumped 73 to $9.17.

The golds rose against the tide of the market, as bullion prices probed 17-year highs at US$473 per oz. The gold index was up only modestly, adding 2.24 points to finish at 220.32. Placer Dome was the most active of the big golds, seeing 8.5 million shares in motion as it gained a quarter to finish at $20.17. Barrick Gold backed up 7 to close at $33.66, Goldcorp added 7 to close at $23.49, and Kinross Gold was 24 higher at $8.93.

Off the gold index, Centerra Gold was a big mover, closing $1.93 higher at $26.

Companies with Venezuelan properties had been hammered in the previous reporting period, following announcements by the Venezuelan government that “inactive” mining concessions would be cancelled and that environmental approvals would be withheld pending decisions on which concessions those might be. Crystallex International was the one most in the public eye, and it recovered 26 to close at $1.86, only 16 behind its price at the time of the announcements. Gold Reserve also clawed back 17, finishing back out of bad-dream territory at $2.71. The one that didn’t climb back to pre-announcement levels was Bolivar Gold, which was down 22 at $2.23.