* TSX rises 26.58 points, or 0.21 percent, to 12,843.46
* Seven of 10 main index sectors advance
* Potash Corp drops after rival cuts sector forecast
* RBC has biggest positive influence on the index
By John Tilak
TORONTO, Sept 17 Canada's main stock index was
cautiously higher on Tuesday with financial shares leading the
way as the market braced for a two-day U.S. Federal Reserve
policy meeting that was expected to result in a slow tightening
of U.S. monetary policy.
A jump in Valeant Pharmaceuticals International after
Goldman Sachs resumed coverage of the stock with a "conviction
buy" rating further supported the market.
But gains were limited by a decline in fertilizer Potash
Corp a day after competitor Mosaic Co cut its
third-quarter sales and price outlooks for fertilizer
ingredients potash and phosphate.
All eyes were on the Fed, whose Open Market Committee
started meeting Tuesday and was set to decide whether to scale
back the Fed's bond buying program. It will announce its
decision on Wednesday.
"The market seems to be relatively sanguine about things,"
said Gavin Graham, chief strategy officer at Integris Pension
Management Corp, adding that investors may have priced in any
moderate trimming of stimulus.
"The market is saying, 'we've had this selloff in
anticipation. When we actually hear tomorrow what the pace of
tapering is, maybe it won't be as bad as we expected'," he
The Toronto Stock Exchange's S&P/TSX composite index
was up 26.58 points, or 0.21 percent, at 12,843.46.
Seven of the 10 main sectors on the index were higher.
Financials, the index's most heavily weighted sector,
advanced 0.4 percent after Canadian banks reported strong
results last month, with several raising dividends.
Royal Bank of Canada, the country's biggest lender,
added 0.7 percent to C$66.36 and played the biggest role of any
single stock in leading the index higher. Toronto-Dominion Bank
climbed 0.6 percent to C$91.37.
Valeant shares were up 0.9 percent at C$105.39, boosting the
The materials sector, which includes mining stocks, slipped
0.2 percent, with a decline in Potash Corp overshadowing a rise
in gold producers.
Potash fell 1.9 percent to C$33.42 and had the biggest
negative influence on the index. Its shares are
down about 14 percent since the breakup of a Russian-Belarusian
potash consortium on July 30. The breakup has been expected to
result in a drop in potash prices.
Graham said Potash's stock is a good buy at these levels,
given the company's strong cash flow generation and dividend
yields. "With further weakness on the back of the Mosaic
forecast, you'd have to think the bad news is already reflected
in how badly it's performed."