Banks, Valeant, resource shares drive TSX higher
By Alastair Sharp
TORONTO (Reuters) - Canada's main stock index gained three-quarters of a percent on Monday in a broad-based move after Italy ended months of political uncertainty with the formation of a coalition government.
The sharp rise was led by some of the country's heavyweight banks and resource companies, while Valeant Pharmaceuticals International Inc (VRX.TO: Quote) also gained after a source told Reuters the acquisitive company had pulled back from talks on a multibillion-dollar merger.
With prices for gold, copper and oil all moving higher, Canada's energy and mining stocks recovered some ground after a recent plunge. <GOL/><O/R>
"From a value perspective, they're all pretty good value versus the market," said Marcus Xu, a portfolio manager at MY Capital Management Corp in Vancouver, referring to the mining and other resource stocks that make up almost 40 percent of the Toronto Stock Exchange's benchmark index.
He said the gains may have been prompted, at least in part, by investors who had bet on gold-mining stocks falling further deciding to cover their short positions.
"But trying to time the turning points, or pinpoint when the short-covering will happen is very difficult," Xu said.
Canadian miners have been looking for ways to trim costs to protect earnings in the face of recent falls in metal prices.
Barrick Gold Corp (ABX.TO: Quote), the world's biggest gold miner, added 3.7 percent to C$19.50, while First Quantum Minerals Ltd (FM.TO: Quote) - which explores for and develops copper, gold, nickel and other mining projects - also gained 3.7 percent, to C$17.29. Continued...