Canada Stocks Rally to 2-Week High Amid China Stimulus Optimism
Valeant, Concordia rebound to pare weekly losses in drugmakers
Global stocks advance as China cuts rates to boost economy
Canadian stocks joined a global equities rally sparked by optimism central-bank stimulus will jumpstart growth.
The nation’s benchmark index rose to a two-week high, as Valeant Pharmaceuticals International Inc. halted a four-day rout. Canada’s largest lenders contributed the most to gains, while materials producers also advanced.
Central banks are reasserting dominance over the global financial markets, sparking demand for risk assets, as China’s central bank cut its benchmark lending rate a day after the European Central Bank signaled it will consider bolstering a bond-buying program before the end of the year. Canada’s central bank held rates steady this week.
The Standard & Poor’s/TSX Composite Index rose 75.55 points, or 0.5 percent, to 13,953.66 at 4 p.m. in Toronto. The gauge posted a 0.8 percent gain in the week. It’s extended an October rally to 4.9 percent, on pace for the biggest monthly increase since 2011.
China, Canada’s second-largest trading partner after the U.S., is determined to meet its 2015 growth target of about 7 percent in the face of deflationary pressures, overcapacity and tepid global demand. The ECB said it will increase its bond purchases to stimulate growth if needed.
Materials producers in the Canadian benchmark advanced 2.4 percent as a group, after the Chinese stimulus fueled bets that demand for resources will increase. Energy shares slid with the price of crude capping the biggest weekly loss since August in New York.
Health-care shares surged 5.8 percent to trim the group’s biggest weekly loss on record to 31 percent. Laval, Quebec-based drugmaker Valeant rebounded 6 percent, snapping a four-day slump that wiped out 36 percent amid intense investor scrutiny over its pricing practices and relationships with specialty pharmacies. Concordia Healthcare Corp. rallied 22 percent as the smaller drugmaker surged 43 percent in two days to erase a weekly loss.
Valeant said Thursday it will hold a conference call on Oct. 26 to discuss the claims against the company. Quebec’s Autorite des Marches Financiers said in an e-mailed statement Thursday allegations about the company are “worrisome” and it is checking to see if they ran afoul of any regulations.