TORONTO (Reuters) - Canada’s main stock index rose on Monday as most major sectors benefited from bullish global equity market sentiment ahead of a crucial U.S. Federal Reserve policy meeting later this week.
A gain in Valeant Pharmaceuticals International Inc (VRX.TO) provided further support and helped overcome a fall in oil and gas shares spurred by lower crude prices.
The rise in shares of the drugmaker came after Salix Pharmaceuticals Inc SLXP.O agreed to Valeant’s increased takeover offer of $173 per share cash in a $10.96 billion deal.
Oil prices dropped again as global inventories climbed, with U.S. crude trading at a six-year low. [O/R]
The advance in the Toronto stock market’s benchmark TSX index followed a 1.5 percent drop the previous week, when investors speculated that the Fed might soon opt for an interest rate increase. The U.S. central bank is set to release a statement on Wednesday.
“The markets are starting the week off with some optimism. Investors are looking to the Fed meeting to get some clarity on possible interest rate hikes,” said Youssef Zohny, portfolio manager at StennerZohny Investment Partners+ of Richardson GMP Ltd, which manages about C$27 billion in assets.
“It looks like markets have priced in rate increases in September, and possibly June,” he added. “The big question mark is, how will the markets react?”
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed up 131.26 points, or 0.89 percent, at 14,862.76. Nine of the 10 main sectors on the index were higher.
Valeant jumped 2.4 percent to C$258.42.
Editing by Peter Galloway and Jonathan Oatis