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* 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 (Reuters) - 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 multibillion-dollar merger. With prices for gold, copper and oil all moving higher, Canada's energy and mining stocks recovered some ground after a recent plunge. "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 ScotiaMcLeod. 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 territory. 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 C$82.04. The broad rise was helped by news that Italy had resolved a political stalemate with the formation of a broad coalition government. 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.