Canada Stocks Drop as Valeant Retreat Overshadows Energy Gains

  • Oil fluctuates as Saudi Arabia says ready to cooperate
  • TransAlta jumps most in 2 years after analyst upgrades stock

Canadian stocks fell, erasing early gains as Valeant Pharmaceuticals International Inc. slumped, overshadowing an advance in energy producers after Alberta unveiled a revamped climate change policy and Saudi Arabia said it’s ready to work to stabilize global oil markets.

Equities fell 0.4 percent in afternoon trading, erasing an advance of as much as 0.6 percent in the morning. Valeant lost 3.4 percent, reversing an earlier 7.7 percent rally and snapping a three-day advance. The embattled drugmaker has tumbled 66 percent from an Aug. 5 record amid scrutiny over its pricing practices.

The Standard & Poor’s/TSX Composite Index fell 51.11 points to 13,382.38 at 4 p.m. in Toronto. The S&P/TSX added 2.7 percent last week, the most since Oct. 9. The index has pared declines for the year to 8.5 percent, trailed only by Singapore and Greece among developed markets. 

Royal Bank of Canada and Bank of Nova Scotia slipped at least 0.7 percent to lead lenders lower. Industrial shares dropped 1 percent as a group, as Canadian Pacific Railway Ltd. lost 1.1 percent to snap a five-day gain. Canadian Pacific jumped 9.8 percent last week after going public with its pursuit of Norfolk Southern Corp.

Alberta provided greater clarity for energy companies operating in the province, saying it will cap oil-sands emissions for producers such as Suncor Energy Inc. and Imperial Oil Ltd., implement an economy-wide price for carbon and phase out coal power plants.

TransAlta Corp., an electricity generator in Calgary, soared 9.5 percent for the biggest advance in two years. Analysts at RBC Capital raised the stock to “sector perform,” the equivalent of a neutral rating, in part due to clarity from the release of Alberta’s climate change framework.

“It is now certain that coal-fired generation will be phased out by 2030,” TransAlta Chief Executive Dawn Farrell said in a statement Nov. 22. The company is reviewing the new policy to assess how it will impact TransAlta’s business and strategy, the release said.

West Texas Intermediate traded near $42 a barrel after Saudi Arabia repeated that it’s willing to work with OPEC and other producers. The Organization of Petroleum Exporting Countries is due to meet Dec. 4. Oil has slumped about 45 percent over the past year.

Energy and raw-materials producers, along with health-care stocks, have dropped at least 21 percent this year to lead declines in the S&P/TSX. A combination of slowing economic growth in China and a rally in the U.S. dollar due to impending interest-rate increases from the Federal Reserve as soon as December have crimped commodities prices.

First Quantum Minerals Ltd. sank 5.8 percent. Copper fell below $4,500 a metric ton for the first time in six years and nickel touched the lowest in more than a decade.

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