TSX falls as in-line Scotiabank leads banks lower

Tue Feb 28, 2017 5:18pm EST
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By Alastair Sharp

TORONTO (Reuters) - Canada's benchmark stock index fell on Tuesday, its fifth straight losing session, as Bank of Nova Scotia led losses in the heavyweight financial banking sector after reporting quarterly earnings in line with expectations.

Scotiabank shares fell 2.8 percent to C$77.04, while rival Bank of Montreal rose 2.2 percent to C$100.79 after its numbers smashed past analyst estimates and it announced a major share buyback plan.

The financials group, which accounts for 35 percent of the index's weight, fell 0.7 percent overall.

"The short of it is, the banks have done really well, they're now delivering on the earnings ... now how do you follow that when you're already trading at a historical premium valuation?" said Luciano Orengo, a portfolio manager at Manulife Asset Management.

The Toronto Stock Exchange's S&P/TSX composite index settled down 64.27 points, or 0.42 percent, at 15,399.24.

It slipped 0.1 percent in February, after hitting a record high mid-month.

Valeant Pharmaceuticals International Inc slumped 13.9 percent to C$18.89 after saying that 2017 would be another year of transition with revenue falling as much as 8 percent amid drug price pressure and fewer prescriptions.

"If you're buying Valeant at these levels, you're expecting some sort of upside and that was not delivered," Orengo said.   Continued...

A TMX Group sign, the company that runs the Toronto Stock Exchange (TSX), is seen in Toronto, June 23, 2014. REUTERS/Mark Blinch