- Crude jumps to November high as Goldman notes shift to deficit
- Valeant surges as Citron’s Left says he’s long the drugmaker
Canadian stocks rose to a two-week high, as crude prices jumped to the highest in six months and metals from gold to copper rallied.
The benchmark S&P/TSX Composite Index rose 1.1 percent to 13,893.49 at 4 p.m. in Toronto, following a 0.3 percent gain last week. Volume today in the benchmark was about 12 percent lower than the 30-day average. The gauge now trades at 21.3 times earnings, about 11 percent higher than the 19.2 times valuation of the S&P 500, data compiled by Bloomberg show.
Suncor Energy Corp. and Goldcorp Inc. jumped more than 2.6 percent as energy and raw-materials producers climbed at least 1.9 percent to lead gains across nine of 10 industries in the S&P/TSX.
The commodities industries account for about 32 percent of the broader benchmark by market capitalization and have led gains this year, with the materials group surging 41 percent. That’s helped the S&P/TSX post one of the best performances this year among developed economies, behind only New Zealand out of 24 markets.
Gains today came as crude futures rose 3.3 in New York to top $47 a barrel as Goldman Sachs Group Inc. said in a report that the market has shifted into a supply deficit earlier than expected following disruptions around the world.
Gold extended Friday’s gains, pushing its advance this year to 20 percent as investors sought a haven from equity turmoil and the Federal Reserve dialed back expectations for interest rate increases, making the metal more attractive as a store of value. First Quantum Minerals Ltd. and Teck Resources Ltd. rose at least 3.8 percent as iron ore climbed in China as daily steel output jumped to a record in April.
Valeant Pharmaceuticals International Inc. rose 3.8 percent to reverse earlier losses. Short-seller Andrew Left of Citron Research said he was “long for Valeant” and wouldn’t be surprised if the shares bounce up.
The embattled drugmaker also announced expanded hospital rebates for two heart drugs at the center of congressional investigations of price hikes. Last week, the New York Times reported major hospital systems in the U.S. weren’t receiving discounts on the drugs Valeant had promised. The stock is down more than 90 percent from an August peak.
Penn West Petroleum Ltd. plunged 22 percent, the biggest decline since 1992, after the oil producer said it was working with lenders to amend its borrowing limits by the end of the second quarter and is a “going concern” risk if it can’t reach an agreement. Penn West will continue asset sales and look for other sources of capital from investors. The company had C$1.86 billion in long-term debt at the end of the first quarter.