CANADA STOCKS-Valeant leads decline as TSX hits one-week low

Wed May 28, 2014 10:56am EDT
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* TSX falls 91.73 points, or 0.63 percent, to 14,566.29
    * Nine of the 10 main index sectors decline
    * Valeant drops 3.6 percent after raising Allergan bid

    By John Tilak
    TORONTO, May 28 (Reuters) - Canada's main stock index fell
to its lowest in a week on Wednesday, hit by a decline in shares
of Valeant Pharmaceuticals International Inc after the
drugmaker raised its takeover offer for Allergan Inc.
    Valeant's stock gave back 3 percent after the company
increased the cash component of its unsolicited offer for
Allergan Inc, valuing the U.S. drugmaker at $49.44
    Also weighing on the market, shares of the heavyweight
energy and mining sectors were pulled lower by weaker commodity
prices. Those groups have been among the best performers on the
TSX this year.
    But Bank of Montreal climbed after the lender's
quarterly profit rose 12 percent, topping estimates, as strong
capital markets and domestic lending income more than offset
weakness at its U.S. retail bank unit. 
    With the Toronto market having outperformed the S&P 500
 so far this year, fund managers are saying that it is
getting harder to find value in Canadian stocks.
    "Individual investors seem to be finding better bargains in
the United States," said Allan Small, a senior investment
adviser at HollisWealth. "(They) are forced to move outside of
Canada for a portion of their investments."
    He said investors should see if they can handle the risks
involved with staying in the Toronto stock market's gold and
energy sectors, adding that the prices of oil and bullion could
fall further in the near term.
    The Toronto Stock Exchange's S&P/TSX composite index
 was down 91.73 points, or 0.63 percent, at 14,566.29.
    Small said he sees few catalysts for the Toronto market. He
added, however, that the Canadian financial sector remained
attractive and the recent results from the country's four
biggest banks have illustrated their resilience.
    Nine of the 10 main sectors on the index were in the red on
    Financials, the index's most heavily weighted sector,
declined 0.4 percent, with Royal Bank of Canada falling
0.7 percent to C$74.77. But BMO added 0.4 percent to C$77.10.
    Shares of energy producers slipped 0.7 percent. Canadian
Natural Resources Ltd was down 0.9 percent at C$43.56,
and Suncor Energy Inc dropped 0.9 percent to C$41.51.
    Gold-mining shares shed 1.3 percent, with Barrick Gold Corp
 dropping 1.7 percent to C$16.95, and Goldcorp Inc
 falling 1.6 percent to C$25.15.
    Valeant lost 3.6 percent to C$136 and had the biggest
negative influence on the index.
    ($1=$1.09 Canadian)

 (Editing by Peter Galloway)