- S&P/TSX close to erasing losses for 2016 amid oil rebound
- Quebec regulator `concerned' as Valeant extends slide
Canadian stocks rose, with a fourth straight gain pushing the benchmark index to the highest level since Dec. 31, as an unexpected expansion in Canada’s economy last quarter added to optimism that growth is accelerating in America.
The Standard & Poor’s/TSX Composite Index climbed 1 percent to 12,982.10 at 4 p.m. in Toronto, capping the longest rally in two weeks. The equity gauge has rebounded 7.4 percent from a Feb. 11 low and is 0.2 percent from erasing declines for the year. The index yesterday narrowly avoided a ninth loss in the past 10 months with a 0.3 percent February increase.
Global stocks rallied and the S&P 500 rebounded from a third monthly loss amid data showing U.S. manufacturing steadied last month. Emerging-market currencies and metals rose on speculation central banks in Asia and Europe will add to stimulus a day after China moved to soften the nation’s economic downturn. The U.S. and China are Canada’s two largest trading partners.
Canada’s economy unexpectedly rose at a 0.8 percent annualized pace between October and December, Statistics Canada said Tuesday in Ottawa. Economists had forecast output would be flat, according to a Bloomberg survey. The weakened Canadian dollar reduced imports by the most in six years, taking pressure off the central bank to cut interest rates to record lows.
The S&P/TSX is one of the best-performing markets in the developed world this year, vying with New Zealand for the top spot and outpacing returns from markets in the U.S., U.K. and Germany. Shares in the Canadian benchmark trade at about 20 times earnings, roughly 14 percent more expensive than the valuation of the Standard & Poor’s 500 Index, data compiled by Bloomberg show. Canada’s resource-rich index has benefited from a surge in the price of gold and crude’s rebound from a 12-year low.
Bank of Nova Scotia, Canada’s third-largest lender by assets, climbed 5.8 percent for the biggest increase in seven years after posting rising first-quarter profit, led by its international-banking business. The lender is the last of the nation’s largest banks to report earnings during this period. Toronto-Dominion Bank and Royal Bank of Canada missed analysts’ estimates, while Bank of Montreal and Canadian Imperial Bank of Commerce beat expectations.
Maple Leaf Foods Inc. surged 8.1 percent to a record after fourth-quarter earnings and revenue topped the highest estimates among analysts. The food products maker also boosted its dividend.
Valeant sank 2.3 percent, falling for a fourth day, extending a 2013 low. Shares of the drugmaker pared earlier losses of as much as 11 percent after Nomura analyst Shibani Malhotra said Valeant was viewed with more confidence after conversations with the company. Malhotra maintained a buy rating on the stock.
Quebec’s securities regulator Autorite des marches financiers earlier said it was “concerned” about allegations made against Valeant and would neither confirm nor deny it was investigating the Laval, Quebec-based company.
Shares of the drugmaker have plunged 75 percent from an August high amid intense scrutiny from investors and lawmakers over its pricing practices. The stock added to losses yesterday after the company confirmed the U.S. Securities and Exchange Commission is investigating Valeant in a previously undisclosed probe.