TSX gains broadly, Valeant surges after reshuffle

Mon Mar 21, 2016 4:31pm EDT
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By Alastair Sharp

TORONTO (Reuters) - Canada's main stock index ended higher on Monday, helped by rising financial and telecom stocks and by a surge in Valeant Pharmaceuticals International Inc (VRX.TO: Quote) after it parted ways with its CEO and invited an activist investor to its board.

Valeant shares settled up 8.5 percent at C$37.90 after it said its chief executive, Michael Pearson, would leave and billionaire investor William Ackman would join its board as it tries to clean up accounting problems and save its business. It had traded at a peak nearing C$350 last August.

The heavyweight financials group gained 0.5 percent, with insurer Manulife Financial Corp (MFC.TO: Quote) up 2.9 percent at C$19.02. Telecoms added 1 percent overall, with Telus Corp (T.TO: Quote) adding 1.5 percent to C$41.66 and BCE Inc (BCE.TO: Quote) rising 0.9 percent to C$58.37.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed up 64.02 points, or 0.47 percent, at 13,561.09. All 10 main sectors gained, as investors cheered an improved tone that has helped lift the index to highs last seen in November.

"Oil has improved a little bit here and the extreme negativity we had going back three or four months ago has waned a bit and even the Canadian dollar has improved," said Irwin Michael, portfolio manager at ABC Funds.

Energy stocks were barely higher, with oil prices stable after touching a 2016 high above $40 a barrel last week. [O/R]

Michael said trading was subdued ahead of Tuesday's federal budget, the first from the Liberal government elected in October on a promise to spend to boost economic growth.

"We don't know what to expect at this point, although we do know that the deficit we've been forewarned should be C$25-30 billion, with a lot of it should be in infrastructure spending," he said.   Continued...

A sign board displaying Toronto Stock Exchange (TSX) stock information is seen in Toronto June 23, 2014.  REUTERS/Mark Blinch