TORONTO (Reuters) - Canada’s main stock index gained more than 2 percent on Wednesday as surprisingly robust domestic growth data boosted sentiment and Valeant Pharmaceuticals International Inc VRX.TO shares rebounded after being battered by charges of price gauging.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE gained 270 points, or 2.07 percent, to end the session at 13,306.96.
The index still fell 4 percent in September and 8.6 percent in the quarter, however, in its worst quarterly performance since 2011.
“It’s been a bad quarter, a bad three months, and you’re getting a bounce on some of those groups that were badly hurt,” said John Ing, president of Maison Placements Canada.
“It’s not the beginning of the bottom or anything like that, no,” he said. “There’s still too much optimism in valuations.”
Valeant, regularly a significant index mover, jumped 12.9 percent to C$239.36 after tumbling more than 30 percent over the last 1-1/2 weeks. Drugmakers including Valeant have come under fire in recent days over accusations of overcharging for their products.
Canada’s economy grew 0.3 percent in July, the second consecutive month of growth after contracting for the first five months of 2015. Financials, energy, mining and manufacturing were among sectors leading the growth. ECONCA
The figures supported the idea that any recession in the first half of the year was short-lived.
The financials group, which makes up more than a third of the index’s weight, climbed 2 percent. Royal Bank of Canada (RY.TO) jumped 2.4 percent to C$73.70 and Toronto-Dominion Bank (TD.TO) rose 2.2 percent to C$52.58. Seven of the index’s 10 most influential gainers were financial names.
Nine of the index’s 10 main sectors rose, with advancing issues outnumbering decliners by 198 to 42.
The TSX has been extremely volatile in the last month and has been on a steady decline since mid-April, having given back some 15 percent during that period.
A Reuters poll released on Wednesday showed investors expect the index to post its first annual loss since 2011 this year, hurt by concerns including China’s growth and commodity prices. ECONCA
Hudson’s Bay Co (HBC.TO) jumped 9.3 percent to C$22.65 after the retailer raised its sales forecast following the closing of its acquisition of German department store chain Galeria Kaufhof.
Additional reporting by Solarina Ho; Editing by Lisa Von Ahn and Tom Brown