TSX falls as growth worries weigh on banks, energy stocks

TORONTO (Reuters) - Canada’s benchmark stock index eked out a gain on Wednesday, helped by a surge in Valeant Pharmaceuticals, a rebound in oil prices that boosted energy stocks, and continued strength in gold miners as bullion extended a run that has pushed it to a two-year high.

A man walks past an old Toronto Stock Exchange (TSX) sign in Toronto, June 23, 2014. REUTERS/Mark Blinch

Yield-hungry investors also sought out utilities and telecom shares, while global growth worries weighed on financials and a tepid domestic economy hurt consumer names.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended up 11.49 points, or 0.08 percent, at 14,231.06. Six of its 10 main sectors rose.

It had fallen almost 1 percent earlier in the session, as investors fretted about the impact that Britain’s vote to leave the European Union will have on the global economy.

U.S. indexes gained more, with the Federal Reserve expecting to hold off on raising U.S. interest rates even as the country’s economy regains steam.

With rates in Canada and elsewhere likely on hold for some time, investors are buying into defensive stocks that offer dividends.

“There really are no alternatives, when you are looking for yield, when you are looking for growth,” said Allan Small, a senior investment advisor at HollisWealth. “These stocks - utilities, telecoms - they’re at 52-week highs because people are chasing yield.”

Utilities gained 1.1 percent on the day, while telecom stocks were up 0.4 percent.

Valeant Pharmaceuticals International Inc VRX.TO jumped 14.7 percent to C$29.82, its sharpest gain since April 6, after supportive comments from a distribution partner and positive results from a clinical study.

The materials group, which includes precious and base metals miners and fertilizer companies, added 1.4 percent.

Barrick Gold Corp ABX.TO added 3.1 percent to C$30.03 and Franco Nevada Corp FNV.TO gained 1.5 percent to C$103.24.

Centerra Gold CG.TO fell 8 percent to C$7.45 after agreeing to buy U.S.–based Thompson Creek Metals TCM.TO for around $1.1 billion to expand its operations in North America.

The financials group lost 0.7 percent, with Toronto-Dominion Bank TD.TO down 1.1 percent to C$54.83 and Royal Bank of Canada RY.TO off 0.4 percent to C$76.61.

Insurers also fell, with Manulife Financial Corp MFC.TO shedding 1.7 percent to C$16.86 and Sun Life Financial SLF.TO down 1.8 percent at C$40.75.

The value of Canadian energy exports surged in May even as the industry was coping with a major Alberta wildfire, but improved oil sales were not enough to prevent the second-biggest trade deficit on record, Statistics Canada data showed on Wednesday.

Reporting by Alastair Sharp; Editing by Phil Berlowitz and James Dalgleish