Canadian stocks rose as commodities from oil to gold rallied amid optimism over central-bank stimulus and data showed U.S. consumer spending climbed more than forecast in March.
Valeant Pharmaceuticals International Inc. gained 3.3 percent as the drugmaker is said to have been in talks to merge with Actavis Inc. Suncor Energy Inc. increased 1.2 percent as crude touched a two-week high. Semafo Inc. and Detour Gold Corp. surged at least 7.7 percent as gold rallied. Endeavour Silver Corp. advanced 1.8 percent after announcing plans to cut costs due to lower metal prices.
The Standard & Poor’s/TSX Composite Index rose 92.47 points, or 0.8 percent, to 12,312.67 at 4 p.m. in Toronto. The benchmark equity gauge has fallen 3.4 percent in April, heading for the biggest monthly drop since May 2012. Trading volume was 37 percent lower than the 30-day average.
“The commodities were all oversold, the TSX is riding the bounce,” said Keith Richards, a fund manager with ValueTrend Wealth Management in Barrie, Ontario. He helps manage about C$100 million ($99 million). “There’s very little in the way of gold reaching $1,550.”
Crude and gold prices advanced on optimism that central banks will decide to maintain economic stimulus in their meetings this week to bolster growth. Economists surveyed by Bloomberg said European Central Bank policy makers may cut interest rates, while the U.S. Federal Reserve will consider renewing its commitment to bond-buying at a two-day meeting starting tomorrow.
Consumer spending in the U.S., the biggest oil-consuming nation, rose more than projected in March, a Commerce Department report showed today.
Energy, financial and raw-materials stocks contributed most to gains in the S&P/TSX as all 10 industries advanced. The S&P/TSX Energy Index rallied 0.9 percent.
Suncor, Canada’s largest oil producer, rose 1.2 percent to C$29.63 and Canadian Natural Resources Ltd. gained 1.3 percent to C$29.96 as oil for June delivery advanced 1.6 percent to settle at $94.50 a barrel in New York, highest since April 10.
Athabasca Oil Corp. rallied 3.8 percent to C$7.42, rebounding from an April 23 record low after a Canadian aboriginal group that has opposed a planned sale of the company’s Dover oil-sands project to Beijing-based PetroChina Co. said the impasse can be overcome.
The Fort McKay First Nation opposes the Dover development in Alberta due to environmental concerns and forced a regulatory hearing to consider the project. Athabasca needs regulatory approval before it can sell its stake to PetroChina for C$1.32 billion in cash.
Endeavour Silver gained 1.8 percent to C$5.19 after announcing a plan to fire workers and defer planned spending to deal with falling precious metals prices.
“It pays to be prudent at times like this,” Bradford Cooke, chief executive officer with Endeavour, said in a statement.
Detour Gold soared 7.8 percent to C$12.22 and Semafo jumped 7.7 percent to C$1.95 as the price of gold gained 0.9 percent to settle at $1,467.40. The metal rallied 4.2 percent last week after gold plunged into a bear market this month.
Valeant Pharmaceuticals, based in Montreal, climbed 3.3 percent to C$76.85. Merger talks with Actavis, the largest generic-drug maker in the U.S., have stalled due to a disagreement over price, according to people familiar with the matter.
The generic-drug makers had sought to announce a deal as soon as today before Actavis balked at the premium offered by Valeant, said one of the people, who asked not to be identified because the discussions aren’t public. While the talks have halted for now, they may become active again, another person said.