- Crude gains to halt selloff among energy-related companies
- Health-care shares advance as Valeant jumps most in 10 years
Canadian stocks rebounded from a two-year low, joining a rally in global equities as tensions on credit markets eased and oil held onto gains from a six-year low, while Valeant Pharmaceuticals International Inc. rallied the most in a decade.
The Standard & Poor’s/TSX Composite Index advanced 1.8 percent to 12,919.57 at 4 p.m. in Toronto, the biggest gain in a month. The gauge is still down by 12 percent in this year and on Monday slumped to its lowest level since October 2013.
Equities rebounded Tuesday as investors piled into risk assets a day before the U.S. Federal Reserve is expected to raise interest rates for the first time since 2006. The loss of stimulus comes amid ongoing concern that slowing growth in China may spread. Worries that the world’s largest consumer of resources has sent for raw materials tumbling, and pushed Canada’s resource-rich equity benchmark to the the third worst returns this year among developed nations.
Those concerns dissipated, at least for a day, as energy-related companies rose 2.3 percent Tuesday as a selloff in crude halted amid signs that the U.S. may lift an export ban for the first time in 40 years. West Texas Intermediate climbed 2.8 percent, adding to Monday’s 1.9 percent gain.
While traders are pricing in a 78 percent probability that the Fed will raise rates, almost all economists surveyed by Bloomberg predict that the Bank of Canada will hold interest rates steady next year. It would be a rare break between the major central banks as prices plunge for oil, copper and other commodities that Canada produces.
Valeant rose 16 percent, its biggest gain since 2005, after agreeing to cut some drug prices in a distribution pact with Walgreens Boots Alliance Inc. The drugmaker, under scrutiny for its drug-pricing practices, will trim prices by 10 percent for branded prescription-based skin and eye products.
A Canadian index measuring 429 micro-cap companies slid for a seventh consecutive day to a record low. The S&P/TSX Venture Composite Index sank below 500 for the first time yesterday, declining 1.2 percent.