TORONTO (Reuters) - Canada’s main stock index rose on Wednesday, led by energy stocks as oil prices rallied and helped by a sharp rise in the shares of drugmaker Valeant.
The index has rallied more than 15 percent after hitting an almost 3-1/2-year low in January but has been unable to sustain moves since mid-March above its 200-day moving average as a rally in commodity prices lost momentum.
Energy stocks have responded to the rally in oil after the recent pullback in crude had left investors nervous, said John Kinsey, a portfolio manager at Caldwell Securities.
U.S. crude CLc1 prices settled at $37.75 a barrel, up 5.2 percent, after the U.S. government reported a surprise draw in domestic crude stockpiles versus market expectations for a record high.
The energy group rose more than 3 percent, including a near 5 percent rise in the shares of Canadian Natural Resources Ltd (CNQ.TO) to C$35.00.
TransCanada Corp (TRP.TO) advanced 0.7 percent to C$49.18 despite news it is delaying the restart of its 590,000 barrel per day Keystone crude pipeline to early next week.
Shares of Valeant Pharmaceuticals International Inc (VRX.TO) jumped 18.5 percent to C$44.77.
The stock added to Tuesday’s gains as Bill Ackman, an activist investor and recent addition to the company’s board, said a new CEO could be found in weeks rather than months.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed up 42.8 points, or 0.32 percent, at 13,347.46. Five of the index’s 10 main groups ended higher.
First-quarter earnings will be the next catalyst for the market, according to Kinsey.
“I don’t think expectations are too high ... As always people will be looking to see if there’s good guidance,” he added.
The financials group fell more than 0.3 percent, including a 0.8 percent drop in the shares of Toronto-Dominion Bank (TD.TO) to C$54.93.
Consumer staples also dragged, falling 1.5 percent.
It follows disappointing Canadian trade data on Tuesday which dampened optimism about the strength of Canada’s economy at the start of the year.
Additional reporting by Alastair Sharp; Editing by James Dalgleish