Canadian stocks flat as crude retreats

Canada's main stock market in Toronto was little changed Wednesday to start the month of June as energy stocks led the decline, offsetting moderate gains in financials sector.

The Toronto Stock Exchange's benchmark Standard & Poor's/TSX Composite Index shed 2.09 point, or 0.01 percent, to close at 14,063.69 points. Three of the TSX index's eight main sub-sectors were lower.

Pressured by lower oil prices, TSX energy stocks fell 1.10 percent on bets of inaction at Thursday's meeting of the Organization of the Petroleum Exporting Countries.

Canadian Natural Resources Limited tumbled 2.67 percent to 37.93 Canadian dollars (29.03 U.S. dollars), while Suncor Energy Inc. sank 2.37 percent to 35.36 Canadian dollars.

Husky Energy Inc., the country's number-three-ranked integrated oil company, said it expected to generate free cash flow and may reinstate a cash dividend as crude prices have rallied in recent weeks. Its shares rose 0.26 percent to 15.18 Canadian dollars.

Financials group was slightly up 0.18 percent while shares of National Bank of Canada fell 0.74 percent to 43.20 Canadian dollars. The bank reported a 48 percent drop in quarterly profit after it set aside funds to cover loans to oil and gas companies that had turned sour.

The overall materials group, which includes precious and base metals miners and fertilizer companies, fell as Barrick Gold has agreed to pay 140 million Canadian dollars to resolve a U.S. lawsuit accusing the gold producer of concealing problems at a South American mine and of fraudulently inflating the company's market value, according to court papers.

The gold producer's shares recovered 0.68 percent from early loss to settle at 22.07 Canadian dollars.

Valeant Pharmaceuticals, which has come under scrutiny for its business and accounting practices, said Tuesday it would host a conference call on June 7 to discuss first-quarter results. Valeant's shares rose 3.98 percent to 38.91 Canadian dollars.

On the economic slate, Royal Bank of Canada reported that its RBC Canadian Manufacturing PMI came in at 52.1 during May, above the neutral 50.0 mark and only fractionally lower than the 16-month high of 52.2 recorded in April.

Thousands of evacuees who fled a massive wildfire in the Canadian oil city of Fort McMurray began to trickle back to their homes on Wednesday, though the water was still not safe to drink and other services were limited.

Meanwhile the Organisation for Economic Co-operation and Development (OECD) joins the growing chorus of experts, economists and executives calling for more government action to slow surging home price gains in Canada.

"Very low borrowing rates have encouraged household credit growth and underpinned rapidly rising housing prices, particularly in Vancouver and Toronto, which together are a third of the Canadian housing market," the Paris-based OECD said in a 316-page economic outlook report published Wednesday.

"In relation to household incomes, both house prices and household debt are high. Macro-prudential measures have been strengthened recently but should be tightened further and targeted regionally," said the report.

The call to tighten regulations comes one day after Bank of Nova Scotia CEO Brian Porter told BNN the federal government should consider raising down payment requirements for the second time in less than a year in hopes of tempering double-digit price growth he called "not sustainable."

Ottawa raised the minimum amount of money buyers must put down for homes worth more than 500,000 Canadian dollars in February; but the impact of the change was negligible as Vancouver and Toronto home prices continued to hit new record highs in subsequent months.

The Canadian dollar traded higher at 0.7653 U.S. dollar, compared with Tuesday's closing rate of 0.7628 U.S. dollar. Endit