CANADA STOCKS-TSX steady as miners, Valeant climb; financials slip

Tue May 20, 2014 5:12pm EDT
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* TSX rises 10.45 points, or 0.07 percent, to 14,525.19
    * Six of the 10 main index sectors advance
    * Valeant higher after commenting on Allergan bid plans

    By John Tilak
    TORONTO, May 20 (Reuters) - Canada's main stock index was
little changed on Tuesday as an advance in the materials sector
and gains in Valeant Pharmaceuticals International Inc 
helped offset weakness in some financial shares.
    Valeant shares jumped 3.7 percent after the drugmaker said
that when it announces a sweetened takeover offer for Allergan
Inc on May 28, it will not be the all-cash bid that had
been expected. 
    Opening after a long weekend in Canada, the Toronto stock
market's small gain follows declines in the previous three
sessions. It is up 6.6 percent so far this year.
    Some investors said that markets have been ignoring concerns
about the pace of economic and earnings growth, raising worries
about extended stock valuations.
    "The markets assumed all of the positives and didn't
incorporate any of the negatives," said Subodh Kumar, chief
investment strategist at Subodh Kumar & Associates, noting that
investors are now factoring in geopolitical uncertainty,
sluggish global growth and weaker-than-expected corporate
revenue growth.
    "There is very little room for valuation expansion and
there's potential for a pullback in the equity markets," he
added. "My basic view is that the markets probably won't end the
year much higher than (where) they started."
    The Toronto Stock Exchange's S&P/TSX composite index
 closed up 10.45 points, or 0.07 percent, at 14,525.19.
    Kumar expects a correction in the Canadian benchmark midway
through the year and a recovery towards the end of the year.
    Six of the 10 main sectors on the index were higher on
    The materials sector, which includes mining stocks, rose 0.4
percent, helped by gains in some commodity prices. Barrick Gold
Corp added 0.5 percent to C$18.15, and Potash Corp
 climbed 1.1 percent to C$40.58.
    Shares of energy producers were up slightly despite a
decline in the price of U.S. crude oil. Encana Corp 
rose 0.9 percent to C$24.83.
    But financials, the index's most heavily weighted sector,
declined. Sun Life Financial Inc slipped 0.7 percent to
C$36.73, and Bank of Montreal lost 0.3 percent to
    Valeant climbed to C$142.76, helping push the index's
healthcare sector up 2.4 percent. The stock had the biggest
positive influence on the index.
    ($1=$1.09 Canadian)

 (Editing by Peter Galloway)