- Valeant gains as Citi says investor selloff is overdone
- Gold producers increase as metal rebounds from five-year low
Canadian stocks rose a second day as Valeant Pharmaceuticals International Inc. advanced the most in four years and gold prices rebounded from a five-year low, offsetting a decline in energy shares.
Raw-materials producers jumped 1.2 percent to lead equities higher. Gold futures rose the most in three weeks as a measure of the dollar retreated from the highest in at least a decade. While there is now a 66 percent chance U.S. Federal Reserve policy makers will raise interest rates at their December meeting, the pace of subsequent increases would be slow, according to minutes of their last meeting released Wednesday.
The Standard & Poor’s/TSX Composite Index rose 73.86 points, or 0.6 percent, to 13,473.83 at 4 p.m. in Toronto. The S&P/TSX has declined 7.9 percent this year, trailed only by Singapore and Greece among developed markets.
Canadian equities have faltered this year amid declines in commodity and health-care stocks of at least 20 percent. The country’s equity market has been hampered by a slump in oil prices, slowing overseas growth and the prospect of an interest-rate increase from the Federal Reserve.
Bombardier Inc. ended the day little changed, after gaining as much as 14 percent and losing 6.3 percent. The company agreed to sell a 30 percent stake in its rail business to Caisse de Depot & Placement du Quebec for $1.5 billion, shelving a public stock sale following a strategic review. The deal marks the manufacturer’s second financial injection from within the province in less than a month, after the provincial government invested $1 billion in the C Series jetliner program.
Montreal-based Bombardier has plummeted 69 percent this year, the worst-performing Canadian industrial stock, as the company’s long-gestating C Series has faced repeated delays and cost overruns. The program’s targeted 2016 debut is now more than two years behind schedule, while Bombardier has also had to cancel one business jet, the Learjet 85, and postpone the debut of another.
Energy shares dropped 1.3 percent as oil fell to the lowest level in almost three months. Government data showed U.S. crude stockpiles rose to the highest for this time of year since 1930.
Barrick Gold Corp. added 4.3 percent and First Majestic Silver Corp. increased 8.9 percent as gold rebounded from a five-year low and silver snapped 15 days of losses. Bullion is headed for a third annual loss on expectations that U.S. growth will spur the Fed to increase borrowing costs, curbing appeal of the metal as a haven investment.
Lucara Diamond Corp. soared 30 percent, the most since December 2008, after discovering a 1,111 carat gem-quality diamond in Botswana. The diamond, just smaller than a tennis ball, is second in size only to the Cullinan diamond cut into the British Crown jewels.
Valeant jumped 15 percent, the most since January 2011. Citi Research Credit analyst Murali Ganti initiated coverage on the drugmaker with a new overweight rating, writing investor reaction to Valeant has been “largely overdone” with much of the bad news priced in.
Valeant, briefly the largest stock in Canada by market capitalization this year, has lost 68 percent from an Aug. 5 high amid pressure over how it prices its drugs. Concordia Healthcare Corp., which has dropped 54 percent since Sept. 4, surged 7.2 percent to extend a five-week high.