* TSX up 0.56 pct at 14,023.43, touches 3-week high
* Eight of 10 sectors rise, led by energy and financials
* Valeant sags as Teva tops bid for Cephalon
* Election day overshadowed by bin Laden news (Adds details, updates prices)
By Ka Yan Ng
TORONTO, May 2 (Reuters) - Toronto’s main stock index hit a three-week high on Monday, influenced by a turnaround in energy prices and buoyed by news that al Qaeda leader Osama bin Laden had been killed.
The heavily weighted energy sector gained more than 1 percent, led by Suncor Energy (SU.TO), which rose 1.8 percent to C$44.42, while Talisman Energy TLM.TO rose 1.8 percent to C$23.25.
U.S. and Brent crude oil futures turned positive after falling sharply overnight on the news of bin Laden’s death in Pakistan, as the risk premium related to geopolitical unrest in the Middle East and North Africa remained intact, analysts said. [O/R]
“Oil turned around. The market is now worried that we may see reprisals for the U.S. killing of bin Laden and thus there’s more nervousness in the oil market,” said Kate Warne, Canadian market strategist at Edward Jones in St. Louis, Missouri.
“A lot of sectors are up, and I think the market continues to be focused on good news,” she added, citing a wave of proposed deals.
The main TSX index rose more than 1 percent to as high as 14,089.10, its strongest level since April 11, riding the rebound in oil, before paring gains.
At 11:45 a.m. (1545 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was up 78.64 points, or 0.56 percent, at 14,023.43. Eight of the index’s 10 sectors were higher.
Materials had fallen about 1 percent early on, but had erased most of those losses by late morning. However, several blue-chip gold and silver names remained under pressure as bullion prices drooped. Goldcorp (G.TO) lost 1.5 percent to C$52.08 and Silver Wheaton SLW.TO was off 2.78 percent at C$37.43.
The healthcare group was the most significant decliner, down 1.02 percent, driven lower by Valeant Pharmaceuticals International Inc VRX.TO, which fell more than 9 percent to C$45.35.
The drug maker was the top decliner on the TSX after its bid for U.S. specialty drugmaker Cephalon Inc CEPH.O was topped by Teva Pharmaceutical Industries Ltd. [ID:nN02205566]
Canada’s general election was overshadowed early Monday by the bin Laden news. Toronto stocks had traded cautiously in the final week leading up to the May 2 vote, with analysts attributing some of the retreat to a campaign shift from uninspiring to thriller with the surge by the left-leaning New Democratic Party in opinion polls. [ID:nN29174448]
The right-of-center Conservatives, who have governed Canada since early 2006, started the campaign with a healthy lead, but saw that dwindle as the NDP pushed past the Liberals to take a strong second place. [ID:nN02201446] [ID:nN29210714]
The last polls close in British Columbia at 10 p.m. Eastern, with the results likely known within a couple of hours. (Reporting by Ka Yan Ng; editing by Rob Wilson)