August 9, 2016 / 11:42 AM / a year ago

Valeant surge helps TSX extend 13-month high

An electronic board displays the midday TSX index in Toronto February 16, 2011. REUTERS/Mark Blinch

TORONTO (Reuters) - Canada’s main stock index extended its rally at a 13-month high on Tuesday, boosted by a surge in shares of Valeant Pharmaceutical International Inc (VRX.TO) after the drug maker said it would sell billions of dollars of assets to pay down debt.

The index notched its fifth straight rising session and second straight close above a high last seen in June 2015.

The most influential gainer by a factor of four was Valeant, which jumped 25 percent to C$36.88 after its CEO said it will sell billions of dollars of non-core assets and could accept offers for its main businesses.

Big banks and gold miners also helped boost the index, while the energy group ended flat even as oil prices fell as a surprise U.S. crude stockpile build last week heightened worries about a global petroleum glut.

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE settled up 45.61 points, or 0.31 percent, at 14,801.23.

Eight of the index’s 10 main groups were in positive territory, as it traded at its highest since June 26 last year.

“Yes, valuations are a concern for us, but we do think the earnings do justify them currently and more of our valuation concern is in the fixed income market,” said Macan Nia, a director of capital markets and strategy at Manulife Investments.

He pointed to real estate investment trusts (REITs) and utilities as having been especially bid up as investors seek yield, while bank stocks remained relatively attractive.

The utilities group fell 0.5 percent, while the financials group that includes REITs and the country’s biggest lenders gained 0.4 percent.

Advancers barely outnumbered decliners overall.

The materials group, which includes precious and base metals miners and fertilizer companies, added 0.3 percent, with Goldcorp Inc (G.TO) up 2.3 percent to C$23.75.

Royal Bank of Canada (RY.TO) rose 0.4 percent to C$80.22, Toronto-Dominion Bank (TD.TO) gained 0.5 percent to C$57.31, and Bank of Nova Scotia (BNS.TO) added 0.3 percent to C$66.90.

The financials sector accounts for more than a third of the index’s weight, while the energy and materials sectors combine to account for another third.

Canadian housing starts fell in July from June, as construction of multiple units - typically condos - fell 13.3 percent after an unexpectedly large gain in June, data from the national housing agency showed on Tuesday.

Editing by Chizu Nomiyama and Sandra Maler

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