TSX flat as miners rise but energy shares drop

Wed May 14, 2014 5:24pm EDT
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By John Tilak

TORONTO (Reuters) - Canada's main stock index was little changed on Wednesday as a gain for gold miners on higher bullion prices was offset by weakness in the energy sector, while healthcare shares fell with Valeant Pharmaceuticals after it said it would sweeten its takeover offer for Allergan Inc.

While digesting news that the European Central Bank was preparing a package of policy options for its June meeting, including cuts in all its interest rates, the Toronto market still appeared to be searching for catalysts that could propel it higher.

It has climbed almost 8 percent already this year.

"Overall there seems to be an element of sector rotation going on," said Elvis Picardo, strategist at Global Securities. "People are getting out of the high momentum names and turning to less favored stocks, the ones that haven't been red hot in recent months."

"The attention is turning to groups that have not participated (in the rally) or that have been the target of disproportionate selloffs in recent months," he added. "By that token, the gold group would certainly qualify."

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed down 6.08 points, or 0.04 percent, at 14,673.73. Six of the 10 main sectors on the index were in the red.

Shares of energy producers lost 0.2 percent despite higher oil prices. Encana Corp (ECA.TO: Quote) dropped 1 percent to C$24.84, and Talisman Energy Inc TLM.TO fell 0.3 percent to C$11.60.

The healthcare sector gave back 0.9 percent, with Valeant Pharmaceuticals International Inc (VRX.TO: Quote) dropping 2.3 percent to C$138.22. Valeant said on Tuesday it will sweeten its unsolicited $47 billion takeover offer for drugmaker Allergan (AGN.N: Quote).   Continued...

A Toronto Stock Exchange (TSX) logo is seen in Toronto November 9, 2007. REUTERS/Mark Blinch