TORONTO, Dec 17 (Reuters) - Canada’s main stock index surged on Wednesday as oil and gas shares wounded in the rout of oil prices regained some vitality on the $8.3 billion bid by Spain’s Repsol to buy Talisman Energy Inc.
The energy group on the benchmark TSX index has shed more than a third of its value since June as the price of crude oil has plummeted to near 5-1/2 year lows. But Tuesday’s news of Repsol’s deal for Canada’s fifth-largest independent producer has encouraged investors to reassess.
“The much beleaguered energy group on the heels of the Talisman takeover is drawing attention to the undervalued nature of the oil patch and so you’re seeing an uptick of this very sorry group,” said John Ing, president of Maison Placements.
In the oil and gas group, Suncor Energy rose 3.5 percent to C$34.15, Cenovus Energy was up 4.8 percent at C$20.80, and Canadian Natural Resources added 3.2 percent to C$33.58
Miners also featured among the gainers. Teck Resources was up 9.1 percent at C$14.22 and First Quantum Minerals Ltd rose 3.3 percent to C$16.54.
The Toronto Stock Exchange’s S&P/TSX composite index was up 181.25 points, or 1.31 percent, at 14,042.77 at midmorning. The index fell more than 5 percent last week.
“Volatility is now the name of the game,” Ing said. “There is a confluence of factors at work, both geopolitical, energy prices, interest rates, all this is leading to the expectations of increased volatility.”
PharmaCan Capital Corp, a company invested in Canadian medical marijuana producers, began trading on the TSX’s smaller Venture Exchange on Wednesday via a reverse takeover of a listed entity.
The stock was little traded at 83 Canadian cents, below its C$1 open.
$1=$1.16 Canadian Reporting by Alastair Sharp; Editing by Peter Galloway