TSX just off record high, Valeant rises

Mon Jul 21, 2014 5:41pm EDT
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By Alastair Sharp

TORONTO (Reuters) - Canada's main stock index took a step back from last week's all-time high on Monday, as a 3 percent jump in Valeant Pharmaceuticals International Inc was more than offset by declines across most major industries.

A ratcheting-up of fighting in Ukraine and the Israel-Gaza conflict gave investors pause, with energy and mining stocks among the heaviest weights.

But that overall caution - eight out of 10 main sectors ended in the red - was counterbalanced by Valeant, which gained amid an acrimonious battle for control of Botox maker Allergan.

Valeant's acquisition target said it would cut jobs in order to remain independent. Valeant complained that Allergan has made false statements as the two companies bicker.

Uranium miner Cameco Corp also moved sharply higher, up 4.2 percent to C$22.82. It had fallen last week on word that output at one of its mines would be delayed.

But more broadly, investors wonder whether optimism about a faltering economic recovery is reflective of reality or if the good vibes could survive an external shock.

"Markets are pretty complacent and have been riding an upward momentum trade," said Youssef Zohny, portfolio manager at Stenner Investment Partners of Richardson GMP in Vancouver.

"Risk sometimes happens quickly and gets priced into the market, and we haven't seen that in a while," he said.   Continued...

A man walks past an old Toronto Stock Exchange (TSX) sign in Toronto, June 23, 2014.  REUTERS/Mark Blinch