TORONTO (Reuters) - Canada’s main stock index rose on Wednesday as the U.S. Federal Reserve stuck with its bond-buying stimulus plan, and as higher oil prices pushed up energy shares.
The index also got a lift from a 7.2 percent jump in BlackBerry (BB.TO) after Morgan Stanley raised its rating on the smartphone maker’s stock, and from a 2.5 percent rise in Valeant Pharmaceuticals International Inc (VRX.TO) after the drugmaker said it would make an acquisition.
The Fed pressed forward with its aggressive efforts to stimulate the U.S. economy, saying it would take into account risks posed by its policies but also how much progress it was making in lowering unemployment.
“The continued growth in the United States will help put a floor under the TSX and even translate into gains down the road,” said Elvis Picardo, strategist and vice president of research at Global Securities in Vancouver.
“Unless we have a big market decline, the TSX should power ahead, led largely by the materials and energy groups,” he added.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was up 52.68 points, or 0.41 percent, at 12,826.55. All the 10 main sectors on the index advanced.
Toronto stocks were recovering from declines recorded in the previous two sessions on fears of a Cyprus default and banking meltdown.
Market strategists expect Canadian stocks will rise 8 percent this year, a Reuters poll found, with an improving global economy expected to boost the badly lagging shares of Canadian natural resource companies. <EPOLL/CA>
The index’s energy sector added 0.2 percent as the price of oil rebounded from the three-month low it hit in the previous session. In the group, oil company Canadian Natural Resources Ltd (CNQ.TO) climbed 1 percent to C$33.62.
BlackBerry shares rose to C$16.53, driving the information technology sector up 2.6 percent. Analysts at Morgan Stanley doubled their price target for the stock, saying they expect the company’s new BlackBerry 10 devices to boost margins.
“The stock has had a big run. What’s happening to BlackBerry is indicative of the risk appetite in the market at large,” said Picardo. BlackBerry shares have more than doubled since hitting a 52-week low in September.
“You’re seeing a return to riskier assets, but sentiment can turn sharply,” he cautioned. “We’ve been telling our clients to hold back a little and not chase the market.”
Valeant said it would buy Obagi Medical Products Inc OMPI.O for about $344 million to boost its dermatology business.
Valeant shares closed at C$75.21 and played the biggest role of any single stock in leading the market higher. As a result, the healthcare sector was up 1.5 percent.
Editing by Dan Grebler and; Peter Galloway