CANADA STOCKS-TSX edges higher as Fed meets; Potash Corp falls
* TSX rises 26.58 points, or 0.21 percent, to 12,843.46 * Seven of 10 main index sectors advance * Potash Corp drops after rival cuts sector forecast * RBC has biggest positive influence on the index By John Tilak TORONTO, Sept 17 (Reuters) - Canada's main stock index was cautiously higher on Tuesday with financial shares leading the way as the market braced for a two-day U.S. Federal Reserve policy meeting that was expected to result in a slow tightening of U.S. monetary policy. A jump in Valeant Pharmaceuticals International after Goldman Sachs resumed coverage of the stock with a "conviction buy" rating further supported the market. But gains were limited by a decline in fertilizer Potash Corp a day after competitor Mosaic Co cut its third-quarter sales and price outlooks for fertilizer ingredients potash and phosphate. All eyes were on the Fed, whose Open Market Committee started meeting Tuesday and was set to decide whether to scale back the Fed's bond buying program. It will announce its decision on Wednesday. "The market seems to be relatively sanguine about things," said Gavin Graham, chief strategy officer at Integris Pension Management Corp, adding that investors may have priced in any moderate trimming of stimulus. "The market is saying, 'we've had this selloff in anticipation. When we actually hear tomorrow what the pace of tapering is, maybe it won't be as bad as we expected'," he added. The Toronto Stock Exchange's S&P/TSX composite index was up 26.58 points, or 0.21 percent, at 12,843.46. Seven of the 10 main sectors on the index were higher. Financials, the index's most heavily weighted sector, advanced 0.4 percent after Canadian banks reported strong results last month, with several raising dividends. Royal Bank of Canada, the country's biggest lender, added 0.7 percent to C$66.36 and played the biggest role of any single stock in leading the index higher. Toronto-Dominion Bank climbed 0.6 percent to C$91.37. Valeant shares were up 0.9 percent at C$105.39, boosting the healthcare group. The materials sector, which includes mining stocks, slipped 0.2 percent, with a decline in Potash Corp overshadowing a rise in gold producers. Potash fell 1.9 percent to C$33.42 and had the biggest negative influence on the index. Its shares are down about 14 percent since the breakup of a Russian-Belarusian potash consortium on July 30. The breakup has been expected to result in a drop in potash prices. Graham said Potash's stock is a good buy at these levels, given the company's strong cash flow generation and dividend yields. "With further weakness on the back of the Mosaic forecast, you'd have to think the bad news is already reflected in how badly it's performed."
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