TORONTO (Reuters) - Canada’s main stock index rose on Monday, boosted by a surge in shares of Open Text Corp after the software company acquired a rival’s assets, and by reduced bets on a Federal Reserve interest rate hike happening soon.
The gain echoed even sharper jumps in U.S. indexes after Fed Governor Lael Brainard, one of six permanent voters on the U.S. central bank’s rate-setting committee, said the Fed should avoid removing support for the economy too quickly.
The Toronto Stock Exchange’s S&P/TSX composite index ended up 57.06 points, or 0.39 percent, at 14,597.06.
The three main U.S. stock indexes rose between 1.3 and 1.7 percent as the comments solidified the view the Fed would leave interest rates unchanged at a policy meeting next week. [.N]
Open Text jumped 9 percent to C$85.01 after agreeing to buy Dell-EMC’s enterprise content division for $1.62 billion.
“Open Text is a firm that is well positioned and well entrenched in the marketplace and I think buying a competitor’s assets just takes a headwind out of its way,” said Kevin Headland, senior investment strategist at Manulife Investments.
“You look at the overall environment out there and growth is very difficult to come by, especially organically,” he added.
Shares in Potash Corp and Agrium Inc both ended lower after initially gaining after the companies agreed to merge in a deal that would create a fertilizer giant with an enterprise value of about $36 billion.
“Ultimately it comes down to demand for the products - soybean, corn, all those commodities are down. Potash prices are not nearly what they once were,” Headland said.
Potash Corp fell 1.4 percent to C$21.83 and Agrium lost 2.5 percent to C$121.04.
Still, the materials group, which includes precious and base metals miners as well as fertilizer companies, added 1.9 percent as gold miners gained with steadier gold prices. [GOL/]
Six of the TSX’s 10 main sectors rose, with advancers barely outnumbering decliners overall.
The heavyweight financials group slipped 0.2 percent, with Fairfax Financial Holdings Ltd down 2 percent at C$729.45 and Manulife Financial Corp down 0.9 percent at C$18.00.
Reporting by Alastair Sharp Editing by W Simon and James Dalgleish