TORONTO (Reuters) - Canada’s main stock index edged higher on Monday as weakness in shares of banks and insurers was offset by a surge in Valeant Pharmaceuticals after the drugmaker announced a major acquisition.
Valeant Pharmaceuticals International Inc VRX.TO shares shot up 15.1 percent to C$250.13, a day after the company agreed to acquire gastrointestinal drugmaker Salix Pharmaceuticals Ltd SLXP.O in an all-cash deal valued at about $10.1 billion.
Meanwhile, a drop in oil prices weighed on the energy sector and banking shares were hit by negative investor sentiment ahead of their earnings reporting season.
Worries about the impact of lower oil prices and fears that the Canadian economy is slowing down have contributed to the bearish mood on the banking sector.
“I’m not bullish on the banks. They have a lot of headwinds,” said Marcus Xu, portfolio manager and president at M.Y. Capital Management Corp in Vancouver. “There’s going to be less activity on lending, less M&A maybe and then we’ve had this Bank of Canada interest rate cut.”
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE ended 28.02 points, or 0.18 percent, higher at 15,200.26. Six of the ten main sectors gained as the index bucked a three-day slip.
Financials, the index’s most heavily weighted sector, fell 1 percent, with Royal Bank of Canada (RY.TO) down 1.2 percent at C$75.13 and Toronto-Dominion Bank (TD.TO) lost 0.8 percent to C$53.54. Insurers also slipped, with Manulife Financial Corp (MFC.TO) off 1.4 percent at C$21.73 and Sun Life Financial Inc (SLF.TO) down 2.5 percent at C$38.46.
Shares of energy companies shed 0.6 percent, as the price of crude fell amid oversupply concerns. Pipeline companies were hit hardest in the sector, with Enbridge Inc (ENB.TO) off 1 percent at C$61.21 and TransCanada Corp (TRP.TO) down 0.8 percent to C$55.12.
Additional writing by Alastair Sharp; editing by Nick Zieminski and Diane Craft