TSX dips on poor GDP growth, Jan. 26-30

The Toronto stock market slipped in the wake of poor economic data and a weakening Canadian dollar. The benchmark S&P/TSX Composite Index declined 105.87 points to 14,673.48 as Statistics Canada said real gross domestic product in November dropped 0.2%, mainly due to declines in manufacturing, mining, and oil and gas extraction. This pushed the Canadian dollar to a six-year low of US78.67¢ against the greenback.

The bright spot in natural resources during the week was oil prices, with Brent oil for March delivery climbing 8.6% to US$52.99 per barrel. The S&P/TSX Capped Diversified Metals & Mining Index gained 5.46 points to 607.98. The S&P/TSX Global Gold Index rose 9.18 points to 194.11, despite the spot gold price closing down US$11 per oz. to US$1,283.10.

Peregrine Diamonds shares rose 39% to 20¢ after it reported a 15% tonnage increase in inferred resources for the upper 250 metres of the CH-6 kimberlite pipe. Located on its wholly-owned Chidliak diamond property in Nunavut, CH-6 now has 3.32 million inferred tonnes grading 2.58 carats per tonne for 8.57 million carats. The junior also significantly increased the exploration potential of kimberlite tonnage on CH-6, and two other pipes on the project, CH-7 and CH-44. But it cautions the tonnage estimates are conceptual in nature. To grow the project’s diamond resource, Peregrine intends to continue core drilling and collecting bulk samples in 2015. It expects to complete a preliminary economic assessment in 2016.

Potash Corp. of Saskatchewan was among the top value gainers, climbing $1.69 to $46.26 per share after posting upbeat earnings of US49¢ per share in the fourth quarter of 2014. Analysts on average had expected earnings of US46¢ per share. The profit boost resulted from record fourth quarter potash sales of 2.5 million tonnes and lower potash costs. Full year earnings came in at US$1.82 per share, down from the US$2.04 per share earned in 2013. PotashCorp expects healthy returns in 2015. It’s forecasting annual earnings per share of US$1.90 to US$2.20, including first quarter earnings per share of US45¢ to US55¢. The producer has increased its annual dividend by 9% to US$1.52 per share.

Eldorado Gold plunged after Greece’s new Energy Minister Panagiotis Lafazanis said he was “absolutely against” the company’s mine in northern Greece. Analysts believe he was referring to the Skouries gold project, one of the biggest foreign investments in the country and among the three projects that Eldorado is advancing in Greece.

“The comments are obviously alarming and somewhat unsurprising given recent comments and actions since the formation of the newly elected Greek government,” writes Raymond James analyst Phil Russo, adding they increase the company’s “geopolitical risk profile.” Eldorado shares ended the week down 93¢ at $6.10, as 29.2 million shares changed hands.