Canadian Stocks Fall on Concerns European Debt Crisis to Spread

May 5 (Bloomberg) -- Canadian stocks fell for a third day, led by oil companies, as protests over Greek austerity measures turned violent and concern mounted that the country’s debt crisis will spread to other European nations.

Suncor Energy Inc., Canada’s largest oil and gas company, declined 5.4 percent as oil futures dropped below $80 a barrel for the first time in five weeks. Kinross Gold Corp., Canada’s third-biggest gold producer, sank 4.4 percent after saying it’s buying a stake in Red Back Mining Inc. Public Storage Canadian Properties, which rents storage space in Canada, jumped 29 percent on a bid to take the company private.

The Standard & Poor’s/TSX Composite Index decreased 155.73 points, or 1.3 percent, to a two-month low of 11,875.13.

“People are worried about Europe,” said David Baskin, president of Baskin Financial Services Inc. in Toronto, which manages C$350 million ($340 million). “Greece is a mess; they’re killing people on the streets. They don’t know what to make of it, and when people are uncertain, they sell.”

The S&P/TSX has slumped 2.7 percent this week for the biggest three-day loss since January as the euro has fallen to a 13-month low against the U.S. dollar. The Reuters/Jefferies CRB Commodity Index fell to its lowest level in five weeks.

Energy and raw materials companies make up 45 percent of Canadian stocks by market value.

‘Grave Contagion‘

Axel Weber, a council member of the European Central Bank, said today Greece’s fiscal crisis threatens “grave contagion effects.”

Greece, Spain, Ireland and the UK had budget deficits of at least 10 percent of gross domestic product last year and Italy’s national debt rose to 116 percent of GDP, according to the European Union’s statistical agency.

Three people were killed today after Greeks protesting proposed spending cuts and tax increases burned down a building containing a bank branch. The country’s biggest airport canceled all flights as air-traffic controllers joined a general strike.

Crude oil futures dropped 3.3 percent, adding to a 4 percent decline yesterday. The S&P/TSX Energy Index sank 2.7 percent, the most since Oct. 28.

Suncor tumbled 5.4 percent to C$32.51. Canadian Natural Resources Ltd., Canada’s second-largest energy company by market value, decreased 4.1 percent to C$73.83. Cenovus Energy Inc., the oil company spun off from EnCana Corp. in December, slumped 3 percent to C$27.76.

Pharmacy-benefits manager SXC Health Solutions Corp. led the S&P/TSX with a 7 percent retreat to C$63.01 before the release of its first-quarter earnings. SXC shares have still nearly doubled over the past nine months.

Banks Fall

The S&P/TSX Financials Index declined to its lowest level since Mar. 11 as banks slipped. Royal Bank of Canada, the country’s biggest bank, lost 0.8 percent to C$61.21. Toronto- Dominion Bank, its largest domestic rival, decreased 1.6 percent to C$73.60. Bank of Montreal, the No. 4 bank by assets, slumped 2.2 percent to C$60.93.

Brokerage GMP Capital Inc. climbed 3.3 percent to C$12.03, snapping a 14-day streak of declines.

Kinross fell 4.4 percent to C$18.21 after announcing it is buying a 9.4 percent stake in Red Back for C$600 million ($582 million). TD analyst Greg Barnes cut his rating on Kinross to “hold” from “buy,” telling clients, “the rationale behind the investment is unclear to us.”

Thomson Reuters Rises

Financial news and information provider Thomson Reuters Inc. climbed 3 percent to a two-year high of C$38.02 after being added to TD analyst Vince Valentini’s “action list” of top stocks.

Producers of coal used in steel mills rallied as China’s benchmark coal price rose the most in four months. Western Coal Corp. surged 6.9 percent to C$5.59 to lead the S&P/TSX. Grande Cache Coal Corp. gained for the first time in 11 days, advancing 9.5 percent to C$6.46. Teck Resources Ltd. increased 0.5 percent to C$37.44.

Public Storage Canadian Properties soared 29 percent, the most in at least 18 years, to C$18.10. An entity controlled by B. Wayne Hughes, the company’s chairman and majority owner, and his daughter, Tamara Gustavson, offered to buy the rest of the company private for C$17 a unit. Public Storage Canadian Properties’ independent directors said an independent valuation found the company’s fair value is C$20 to C$24 a unit.