TORONTO, (Reuters) - Canada’s main stock index dropped on Wednesday, weighed down by weakness in Valeant Pharmaceuticals (VRX.TO) after the drugmaker raised its takeover offer for Allergan Inc (AGN.N) and by a slide in gold-mining shares as the bullion price fell.
Valeant’s stock gave back 2.1 percent after the company increased the cash component of its unsolicited takeover offer for Allergan, valuing the U.S. drugmaker at $49.44 billion.
The Toronto stock market’s benchmark index, which has outperformed the S&P 500 .SPX so far this year, declined for a second straight session. Fund managers were saying that it is getting harder to find value in Canadian stocks.
“The market is drifting,” said John Ing, president of Maison Placements Canada.
“The markets are still on rarefied ground,” he added. “I think that the market is richly valued.”
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed down 47.06 points, or 0.32 percent, at 14,610.96. Eight of the 10 main sectors on the index were in the red.
Financials, the index’s most heavily weighted sector, declined 0.2 percent, with Royal Bank of Canada (RY.TO) falling 0.2 percent to C$75.16.
Bank of Montreal BMO.TO fell 0.2 percent to C$76.62 even though 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.
Valeant declined to C$138.11 and had the biggest negative influence on the index.
Editing by Peter Galloway