April 6, 2011 / 9:10 PM / 6 years ago

CANADA STOCKS-TSX 6-day rally ends as energy, Valeant fall

4 Min Read

   * TSX ends down 67.88 points, or 0.48 pct, at 14,202.65
 * Seven of 10 main sectors lower
 * Valeant shares fall as Cephalon rejects bid
 * Portugal debt woes weigh on investor sentiment  (Adds comments from analyst and fund manager)
 By Jeffrey Hodgson
 TORONTO, April 6 (Reuters) - Toronto's main stock index closed lower on Wednesday, ending six straight sessions of gains, with energy and other resource issues leading the decline even as commodity prices largely rose or held steady.
 Market watchers said signs of fresh sovereign debt problems in Europe were among the factors weighing on sentiment. Portugal's caretaker government said it had decided ask for financing from the European Union, becoming the third euro zone member to seek a financial rescue. [ID:nLDE7350HL]
 Suncor Energy (SU.TO), down 1.93 percent at C$42.76, was the most influential decliner, with peers Imperial Oil Ltd (IMO.TO) and Canadian Natural Resources (CNQ.TO) also weighing on the index.
 Brent crude oil prices rose to a 2-1/2-year high above $123 a barrel before erasing the majority of the gains in volatile trade as market players fretted the recent oil rally was overdone. [O/R]
 "Oil's been pushed to levels that people are starting to worry about whether it could start impinging on the economic recovery ... You've got Portugal back in the news, so we've got the European debt situation starting to come up," said Rick Hutcheon, president of RKH Investments.
 The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed down 67.88 points, or 0.48 percent, at 14,202.65. Seven of the TSX's 10 main groups were lower, with energy stocks dropping 1.21 percent.
 While oil was slightly stronger. U.S. natural gas futures ended lower for a fourth straight day, with comfortable supplies and moderate U.S. weather forecasts driving the front-month contract below key chart support. [ID:nN06249394]
 Healthcare shares fell 1.9 percent, dragged lower by a 3.34 percent decline by Valeant Pharmaceuticals International (VRX.TO). The stock ended at C$50.35, following news that U.S. drug maker Cephalon Inc CEPH.O had rejected its $5.7 billion unsolicited takeover bid. [ID:nN05162826]
 Stock analysts said there was limited impact from news late Tuesday that the Alberta government is mulling setting aside close to 2 million hectares (7,700 square miles) of conservation lands in the Canadian province's prolific oil sands region.
 "The headline scare is a bit more than what the economic reality might actually be," said Michael Sprung, president at Sprung & Co Investment Counsel, who noted a number of macroeconomic concerns were weighing on the broader market.
 "There still is some nervousness, particularly with respect to fears of the oncoming tighter monetary policies, the continuing problems in Europe. With Portugal, we've seen (borrowing) rates going up fairly markedly," he said.
 Still, several investors said they thought Canadian markets were more likely to climb than retreat in coming sessions, lifted by corporate earnings growth, record commodity prices, and a pickup in mergers and acquisitions activity.
 "The market and the economy will continue to saw-tooth their way up. We've just got to be mindful of the saw teeth on the way down," said Irwin Michael, portfolio manager at ABC Funds.
 "There's still a lot of cash out there. Everyone's been waiting for the market to come off and it really hasn't."
  ($1=$0.96 Canadian)  (With additional reporting by Solarina Ho; editing by Peter Galloway)                                        

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