TORONTO (Reuters) - Canada's main stock index fell on Tuesday as Valeant Pharmaceuticals International Inc VRX.TO tanked, overshadowing gains for gold miners and financials ahead of a Federal Reserve interest rate decision on Wednesday.
The shares of Valeant VRX.TO plunged 51 percent to C$45.14 after the drugmaker cut its 2016 revenue forecast by about 12 percent and said a delay in filing its annual report could pose a debt default risk.
“Valeant has got everyone’s attention,” said Paul Hand, managing director at RBC Capital Markets. “It’s really quite stunning.”
Industrial stocks also dragged, including a nearly 3 percent drop in the shares of Canadian Pacific Railway Ltd CP.TO to C$169.88.
However, excluding Valeant, the index would have risen 0.3 percent in quiet trading ahead of the Fed decision.
The materials group, which includes precious and base metals miners and fertilizer companies, advanced nearly 1 percent.
“The stocks are acting better than the commodities, which tells you there is a lot of optimism,” said Hand.
“People think that the commodity rally at some point here has legs to the upside again,” he added.
U.S. crude CLc1 prices settled at $36.34 a barrel, down 2.26 percent.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed down 77.23 points, or 0.57 percent, at 13,400.31. On Friday, the index posted a three-month high at 13,543.29.
Five of the index’s 10 main groups ended lower.
The financials group rose 0.3 percent, while consumer staples was up 0.7 percent.
Reporting by Fergal Smith; Editing by W Simon and James Dalgleish
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