* TSX up 92.47 points, or 0.76 percent at 12,312.67
* Valeant rises after source says merger talks off
* Resource stocks rise on commodity price gains
By Alastair Sharp
TORONTO, April 29 Canada's main stock index
gained three-quarters of a percent on Monday in a broad-based
move after Italy ended months of political uncertainty with the
formation of a coalition government.
The sharp rise was led by some of the country's heavyweight
banks and resource companies, while Valeant Pharmaceuticals
International Inc also gained after a source told
Reuters the acquisitive company had pulled back from talks on a
With prices for gold, copper and oil all moving higher,
Canada's energy and mining stocks recovered some ground after a
"From a value perspective, they're all pretty good value
versus the market," said Marcus Xu, a portfolio manager at MY
Capital Management Corp in Vancouver, referring to the mining
and other resource stocks that make up almost 40 percent of the
Toronto Stock Exchange's benchmark index.
He said the gains may have been prompted, at least in part,
by investors who had bet on gold-mining stocks falling further
deciding to cover their short positions.
"But trying to time the turning points, or pinpoint when the
short-covering will happen is very difficult," Xu said.
Canadian miners have been looking for ways to trim costs to
protect earnings in the face of recent falls in metal prices.
Barrick Gold Corp, the world's biggest gold miner,
added 3.7 percent to C$19.50, while First Quantum Minerals Ltd
- which explores for and develops copper, gold, nickel
and other mining projects - also gained 3.7 percent, to C$17.29.
"What we're looking at here is a rebound in resource
stocks," as the prices for their underlying commodities tick
higher, said Fred Ketchen, director of equity trading at
The Toronto Stock Exchange's S&P/TSX composite index
ended the session up 92.47 points, or 0.76 percent, at
12,312.67. Nine of the index's 10 main groups ended in positive
The two stocks that had the biggest positive influence on
the index were banks: Royal Bank of Canada added 1 percent to
C$60.64, and Toronto-Dominion Bank gained 1.2 percent to
The broad rise was helped by news that Italy had resolved a
political stalemate with the formation of a broad coalition
Valeant gained 3.3 percent to C$76.83 after merger talks
with fellow drugmaker Actavis were put on hold, according to a
person familiar with the situation.
Extendicare Inc shares plunged almost 30 percent to
C$6.14 after the senior citizens' care provider issued a profit
warning and reduced its monthly dividend payout.
ScotiaMcLeod's Ketchen said he expects volatility on the
index on Tuesday as investors react to U.S. consumer confidence
data for April and to Canada's real gross domestic product
reading for February.