Canada Stocks Rebound to Snap Two-Day Slide as Commodities GainEric Lam
Gold producers jump as the metal's price climbs a fourth day
Rona shares double after agreeing to $2.3-billion Lowe's offer
Canadian stocks rebounded to halt a two-day retreat, reversing earlier losses, amid advances by materials and energy producers.
Canadian Natural Resources Ltd. and Goldcorp Inc. surged as commodity companies led a recovery in Canadian equities. Rona Inc. shares doubled after a friendly takeover deal from U.S. rival Lowe’s Cos. Equities slumped earlier amid a drop in shares of Valeant Pharmaceuticals International Inc. and financial companies.
The Standard & Poor’s/TSX Composite Index rose 1.2 percent to 12,593.02 at 4 p.m. in Toronto, erasing earlier losses of as much as 1 percent. The benchmark gauge halted a two-day loss of 3 percent that started February.
Even with a 3.2 percent drop so far in 2016, Canada’s equity benchmark remains the second-best performing developed market in the world behind New Zealand after rallying from a 2 1/2-year low in January. The S&P/TSX also entered a bear market earlier in the month.
Raw-material companies rallied the most as the price of gold climbed for a fourth day to a three-month high. Yamana Gold Inc. jumped 10 percent for the biggest gain since November, while Goldcorp Inc. added 8.2 percent. Energy producers rallied with the price of crude as the falling dollar countered data showing a steep gain in U.S. inventories.
Rona shares surged a record 98 percent to an eight-year high, after the home-improvement retailer agreed to sell itself to rival Lowe’s for C$3.2 billion ($2.3 billion) in cash. Lowe’s will pay C$24 per share, more than double yesterday’s closing price of C$11.77, according to a statement.
Indigo Books & Music Inc. surged 15 percent, the most in more than four years, after third-quarter earnings and revenue climbed.
Valeant, briefly the largest company in Canada by market capitalization last year, gained to erase an earlier decline of as much as 5.5 percent after the U.S. House Oversight and Government Reform Committee released two memos late Feb. 2 detailing internal corporate documents from Valeant and Turing Pharmaceuticals on drug prices. The memos were in preparation for a hearing on skyrocketing prescription prices Thursday.
Manulife Financial Corp. fell to a two-week low, amid concern China may place restrictions on the buying of overseas insurance. Shares of the nation’s largest life insurer have tumbled 6.7 percent in three days.