TSX at highest close in year, 4th weekly gain; telecoms shine

Fri Jul 22, 2016 4:41pm EDT
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By Alastair Sharp

TORONTO (Reuters) - Canada's main stock index hit its highest close in a year on Friday, notching a fourth straight weekly gain as yield-producing telecom and utility stocks found favor, offsetting a plunge in shares of Valeant Pharmaceuticals International Inc (VRX.TO: Quote).

Valeant fell 6.2 percent to C$30.03 after U.S. regulators raised concerns about a new eye drop the company manufactures.

Telecoms climbed 1.3 percent, with Rogers Communications Inc (RCIb.TO: Quote) extending post-earnings gains with a 2.1 percent advance to C$56.81.

Its rivals, which have not yet reported second-quarter numbers, also gained, with Telus Corp (T.TO: Quote) adding 1.6 percent to C$43.96 and BCE Inc (BCE.TO: Quote) up 0.6 percent to C$63.15.

The utilities sector rose 0.7 percent.

Both sectors feature many stocks that pay dividends, making them attractive to investors searching for yield.

"Even though the index is up, it seems like there is some defensive positioning going on," said Youssef Zohny, portfolio manager at StennerZohny Investment Partners+ in Vancouver. "We're taking a more protective stance to hang onto gains," he added.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE settled up 34.83 points, or 0.24 percent, at 14,600.66. That was its highest close since July 17, 2015.   Continued...

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