CANADA STOCKS-TSX hits one-week high as energy, Valeant provide boost

Tue Jul 2, 2013 5:16pm EDT

* TSX rises 49.27 points, or 0.41 percent, to 12,178.38
    * Seven of 10 main index sectors advance
    * Barrick tumbles on mine delay, bullion decline
    * BlackBerry slips after brokerage cuts
    * Valeant climbs 4.8 percent after RBC raises price target

    By John Tilak
    TORONTO, July 2 (Reuters) - Canada's main stock index
touched a one-week high on Tuesday as weakness in gold producers
and smartphone maker BlackBerry was offset by robust
gains in the energy sector, fueled by a jump in the price of
oil, and by a rise in Valeant Pharmaceuticals.
    Investors were encouraged by data showing U.S. new motor
vehicle sales in June were poised to record their strongest
month in more than 5-1/2 years and that factories posted a
second straight month of gains in new orders in May.
 
     The index climbed for a third straight session, playing
catch-up with gains in global equities on Monday, when the
Toronto market was closed for the Canada Day holiday.
     The energy sector had the biggest positive influence on the
Canadian market as supply worries in the Middle East and Africa
boosted oil prices. 
    "We're seeing value across the resource space, including
energy, but definitely not without some volatility," said
Youssef Zohny, portfolio manager at Stenner Investment Partners,
a unit of Richardson GMP. "On a relative basis, the valuations
are becoming very attractive in the energy sector."  
    The Toronto Stock Exchange's S&P/TSX composite index
 closed up 49.27 points, or 0.41 percent, at 12,178.38.
The index hit a high of 12,217.36 earlier in the session.
    Despite Tuesday's gain, the resource-heavy index is down
about 2.1 percent this year because of a lackluster outlook for
commodities, trailing the S&P 500 and other global tock
market measures.
    "It is a stock picker's market," said Jordan Zinberg,
managing director and portfolio manager at Donville Kent Asset
Management. "Investors who are buying the index are going to be
fairly disappointed; they have been fairly disappointed over the
past few years."
    "We're quite negative on the resource market," he added. "I
don't think you'll see global money coming back to the Canadian
market until you see the resource market pick up."
    Donville Kent's Capital Ideas Fund, whose biggest holdings
include Constellation Software Inc and Paladin Labs Inc
, has had a return of investment of more than 12 percent
since the start of the year.
    Seven of the 10 main sectors on the index were higher on
Tuesday.
    Shares of energy producers added 1.2 percent. Canadian
Natural Resources Ltd gained more than 2.1 percent to
C$30.28, and Enbridge Inc was up 1.5 percent at
C$44.88.
    Financials, the index's most heavily weighted sector, rose
0.2 percent. Toronto-Dominion Bank climbed 0.3 percent
to C$84.75.
    Valeant advanced 4.8 percent to C$95 after RBC raised the
stock's price target. The drugmaker played the biggest role of
any single stock in leading the index higher and helped the
healthcare group gain 2.1 percent.
    But the materials sector, which includes mining stocks, gave
back 2.1 percent. The group was dragged down by a nearly 3
percent drop in gold-mining shares as the bullion price slipped.
 
    Barrick Gold Corp lost 7.7 percent to C$15.32. The
miner was also hit by its plans to slow construction at its
already delayed Pascua-Lama gold project in South America as it
looks to rein in spending. 
    BlackBerry extended its decline after releasing a
disappointing quarterly report on Friday. A slew of brokerages
have since cut their ratings and price targets on the stock.
BlackBerry dived 7.8 percent to C$10.22.
A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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