March 30, 2011 / 8:46 PM / 8 years ago

CANADA STOCKS-TSX rallies on Valeant, firm US jobs data

 * TSX ends up 153.23 points, or 1.1 percent, at 14,083.58
 * All 10 of the main sectors higher
 * Valeant shares surge 12 percent
 * U.S. private employers add more than 200,000 jobs  (Updates to close, adds details, commentary)
 By Claire Sibonney
 TORONTO, March 30 (Reuters) - Toronto’s main stock index rose broadly on on Wednesday after encouraging U.S. jobs data and an unsolicited bid by Valeant Pharmaceuticals International VRX.TO to buy Cephalon Inc CEPH.O lifted market sentiment.
 Valeant shares surged 12 percent to C$48.54 after it made a $5.7 billion bid for U.S.-based drugmaker Cephalon. Cephalon shares soared almost 29 percent to $75.44, above Valeant’s offer price of $73, in a sign investors expected a higher bid. [ID:nN30126551]
 The Toronto index’s healthcare group .GSPTTHC — the smallest of its main 10 sectors — was up 3.5 percent.
 “Any time you see an aggressive acquisition like that it leads to more confidence, so today I’d say broad-based gains are mostly due to positive data and improving confidence,” said Youssef Zohny, portfolio manager at Van Arbor Asset Management in Vancouver.
 U.S. private employers added more than 200,000 jobs in March while planned layoffs fell, underscoring expectations that momentum in the labor market will underpin the economic recovery. Investors are looking ahead to Friday’s nonfarm payrolls report for further detail on this. [ID:nN30275708] [ID:nN30121489]
 The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE ended up 153.23 points, or 1.1 percent, at 14,083.58. All 10 of the index’s main groups were stronger.
 Zohny said the index’s ability to hold above the 50-day moving average of 13,700 is a positive sign, as is month-end and quarter-end buying.
 “The fact that the market has been able to weather a bit of a storm this month and has been fairly resilient is definitely attracting new flows into equities,” he said.
 The materials group, home to miners and fertilizer companies, was up 1.7 percent, while oil and gas companies added 0.7 percent.
 Among the biggest gainers, Barrick Gold (ABX.TO) rose 1.3 percent to C$50.08, Potash Corp POT.TO climbed 1.6 percent to C$56.59 and Teck Resources TCKb.TO was also up 1.6 percent at C$52.75.
 In other mergers and acquisitions news, Lundin Mining (LUN.TO) shares rose 4.9 percent to C$7.96 and Inmet Mining IMN.TO jumped 6.7 percent to C$66.62. The two companies scrapped a merger plan, and Lundin was hunting for a bidder to trump a C$4.4 billion takeover offer from Equinox Minerals EQN.TO. Equinox shares were up 2.7 percent to C$5.63. [ID:nN29277609]
 Gavin Graham, president of Graham Investment Strategy, said the recent deals activity in the market is a sign of increased corporate confidence.
 “Cash is cheap with interest rates being very low, management’s feeling a lot more confident than they were even a year ago,” he said.
 Economically sensitive financial shares were up 1.1 percent with Toronto-Dominion Bank almost 2 percent higher at C$86.40.
 National Bank of Canada (NA.TO) shares were also up almost 2 percent at C$78.81. They hit a record high earlier in the session, after its chief executive announced he was mulling a stock split. [ID:nN30162791]  
 ($1=$0.97 Canadian)  (Additional reporting by Solarina Ho; editing by Jeffrey Hodgson)                                        

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