CANADA STOCKS-TSX gains led by resource stocks, Valeant

(Adds strategist comment, details; updates prices)

* TSX rises 61.32 points, or 0.45 percent, to 13,590.49

* Resource stocks jump 1.8 percent

TORONTO, Nov 2 (Reuters) - Canada’s main stock index managed a modest bounce on Monday after falling sharply to end last week, helped by a rebound in Valeant Pharmaceuticals International Inc and by gains in resource stocks.

The market shrugged off disappointing manufacturing data from China, with the slower pace of contraction heartening investors.

“We are starting to see signs that deceleration (in China) is leveling off a little bit,” said Craig Fehr, Canadian market strategist at Edward Jones in St. Louis, Missouri.

The materials group rallied 1.8 percent, paced by fertilizer stocks. Potash Corp gained 3.1 percent to C$27.30 and Agrium Inc added 1.2 percent to C$123.15.

Cameco Corp, however, tumbled nearly 3 percent after posting lower adjusted quarterly earnings on Friday as an oversupply continued to affect demand and pricing.

At 2:28 p.m. EST (1928 GMT), the Toronto Stock Exchange’s S&P/TSX composite index rose 61.32 points, or 0.45 percent, to 13,590.49.

Across the index, advancing issues outnumbered decliners by 144 to 94.

The index had dropped nearly 2 percent on Friday as Valeant slumped and the banking sector retreated, trimming the monthly gain for October to 1.7 percent.

But Valeant rebounded on Monday, jumping 7.1 percent to C$130.67, after a short-seller’s latest report on the embattled drug company did not include new allegations.

The index’s energy group gained 1.8 percent, with Canadian Natural Resources adding 2.5 percent to C$31.08. Sources told Reuters late last week that the company has discussed spinning off royalty assets with some pension plans and strategic buyers.

The rally in the energy group came despite a 1.2 percent drop in U.S. crude oil to $46.02 a barrel.

Consumer staples fell 0.9 percent, with Empire Co Ltd down 3.0 percent at C$26.57.

The heavyweight financials group slipped 0.2 percent, with losses for some major bank stocks offsetting gains for insurers. Manulife Financial Corp advanced 0.6 percent to C$21.80 and Bank of Montreal fell nearly 1 percent to C$75.32. (Additional reporting by Alastair Sharp; editing by James Dalgleish and G Crosse)