Canadian Stocks Rise, Snap 3-Day Drop as Valeant AdvancesEric Lam
Canadian stocks rose, snapping a three-day loss, as Valeant Pharmaceuticals International Inc. rallied after agreeing to acquire a U.S.-based drugmaker, offsetting a drop among the nation’s lenders.
Valeant jumped 15 percent after reaching a deal to buy Salix Pharmaceuticals Ltd. for $10.1 billion. Parkland Fuel Corp. gained 2.6 percent after agreeing to buy 11 Chevron-branded service stations in British Columbia. Royal Bank of Canada retreated 1.2 percent to pace declines among financials stocks. Ballard Power Systems Inc. surged 7.5 percent after signing technology solutions contracts.
The Standard & Poor’s/TSX Composite Index rose 28.87 points, or 0.2 percent, to 15,201.11 at 4 p.m. in Toronto. The guage erased losses in the final 30 minutes of trading to extend its gain this year to 3.9 percent. Trading volume Monday was 24 percent below the 30-day average.
West Texas Intermediate crude dropped 2.7 percent amid speculation excess supply will increase as Libya restarted a pipeline halted by a fire and the U.S. idled fewer drilling rigs than in previous weeks.
Prices pared earlier losses after Nigeria’s oil minister was reported by the Financial Times to have said that OPEC members have discussed an emergency meeting. A delegate from the group later denied there are plans for such a meeting. OPEC’s next regular gathering is on June 5.
Energy shares in the S&P/TSX nearly erased a drop of 1.7 percent on the OPEC report before closing down 0.6 percent. Parkland Fuel added 2.6 percent while Lightstream Resources Ltd. tumbled 10 percent.
Banks in the Canadian benchmark fell 0.7 percent as a group. The lenders account for about one-third of the broader index by weighting.
Canadian Western Bank, the lender based in oil-rich Alberta, tumbled 2.8 percent. Royal Bank, the nation’s second-largest lender, retreated 1.2 percent. Bank of Montreal, the first of the big banks to report earnings this week on Tuesday, slipped 0.7 percent.
Valeant soared 15 percent for the biggest gain since January 2011, extending an all-time high. Shares of the company have surged 20 percent in the past five sessions.
Valeant’s acquisition of Salix values the company at about $14.5 billion including net debt, and will provide a “modest” addition to earnings this year, according to Bridgewater, New Jersey-based Valeant. The drugmaker expects to win regulatory approval for Salix’s Xifaxan drug for treating irritable bowel syndrome with diarrhea.