Canada Stocks Fall as Crude Declines Amid Global Growth Concernby
IMF set to lower global outlook as Fed warns on external risks
Valeant rises a third day after lenders agree to waive default
Canadian stocks fell for the fifth time in six sessions, as energy producers declined to overshadow a resurgence by Valeant Pharmaceuticals International Inc.
The Standard & Poor’s/TSX Composite Index lost 0.6 percent to 13,266.44 at 4 p.m. in Toronto. While the Canadian benchmark has lost 1.8 percent in the past six trading days, it is up 2 percent this year and remains one of the best-performing developed markets in the world.
Stocks worldwide retreated Thursday on concern about growth. Federal Reserve officials highlighted persistent risks facing the global outlook at their March meeting, while International Monetary Fund Managing Director Christine Lagarde signaled the organization may lower its outlook for growth.
A first-quarter rally in the S&P/TSX has lost momentum in the second, as volatility returned to commodities prices. The Canadian benchmark equity gauge now trades at 21.1 times earnings, about 14 percent higher than the 18.6 times earnings valuation of the S&P 500, according to data compiled by Bloomberg.
West Texas Intermediate crude slipped 1.3 percent in New York amid speculation that an unexpected U.S. crude supply decline won’t be followed by additional drops. Ahead of a meeting of OPEC producers in Doha later this month to debate a production freeze, Saudi Arabia has said no agreement is possible without the participation of Iran while Kuwait said a deal can still be made.
Energy producers and financial services stocks contributed the most to losses in the S&P/TSX, as six of 10 industries retreated. Trading volume was about 15 percent lower than the 30-day average. Gold producers rallied as the price of the metal jumped to a one-week high after Fed minutes Wednesday indicated caution on interest rate increases.
Consumer discretionary stocks retreated 1.4 percent, led by a second day of losses in auto-parts maker Magna International Inc. Technology shares fell to halt a three-day rally.
Valeant added 4.3 percent for a third day of gains after winning the support of lenders to waive a default and ease some restrictions on its loan terms. Valeant now has until May 31 to file its annual report, and July 31 to file its first-quarter report. The drugmaker has rebounded from a five-year low, increasing 36 percent in the last three days after saying Tuesday a special “ad hoc” board committee found no additional accounting issues that would require more restatements.
The drugmaker is also actively discussing the sale of its Bausch and Lomb unit, Fox Business Network reported late Thursday, according to unidentified bankers.