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CANADA STOCKS-TSX down as banks and energy weigh; Valeant, Home Capital soars

Published 2017-05-09, 05:21 p/m
© Reuters.  CANADA STOCKS-TSX down as banks and energy weigh; Valeant, Home Capital soars
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* TSX down 82.88 points, or 0.53 percent, to 15,569.2

* Seven of the TSX's 10 main groups fell

By Solarina Ho

TORONTO, May 9 (Reuters) - Canada's main stock index fell on Tuesday as banks, oil and gas companies pulled the market lower, but losses were modestly tempered by Valeant Pharmaceuticals (NYSE:VRX) International VRX.TO and Home Capital Group Inc HCG.TO stocks, which soared as investors cheered news from the companies.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE fell 82.88 points, or 0.53 percent, to 15,569.2. Seven of the 10 most influential index movers were in negative territory.

Home Capital Group, which was accused by the Ontario securities regulator for making misleading statements to investors, saw its shares surge after it said an unnamed buyer intended to purchase up to C$1.5 billion ($1.09 billion) worth of its mortgages.

The overall financials group fell 0.9 percent, however.

Thirteen of the 15 biggest drags on the index were financial and energy companies, and accounted for the bulk of declines.

Royal Bank of Canada RY.TO was by far the most influential driver on the downside, falling 1.3 percent to close at C$92.94. Bank of Nova Scotia BNS.TO followed, with a 1.1 percent decline to end at C$75.91.

Michael Simpson, senior portfolio manager at Sentry Select Capital Corp said bank weakness could be attributed in part to concerns about weaker oil prices on the economy, but also to Home Capital related concerns.

"More short-term investors are concerned about the quality of the books of the Canadian banks, consumer debt showing no sign of abating, and Canadian real estate price in Toronto being quite robust," Simpson said. "Some would wisely ask, how long can this keep going?"

The energy group retreated 1.1 percent, mirroring declines in U.S. crude prices CLc1 , which were down 0.6 percent at $46.17 a barrel. O/R

"Today's losses is a continuation of weakness we've seen throughout the year in energy," Simpson said.

"The judgment by the market is that there's too much oil, so this will cause a headwind for companies that are producing."

Canadian Natural Resources Ltd CNQ.TO fell 1.6 percent to C$42.35.

Healthcare was among the few gainers, rising 5.5 percent. Valeant skyrocketed 24.1 percent to C$16.58 after it raised its earnings outlook and reported its first quarterly profit in six quarters.

Software company Open Text Corp OTEX.TO retreated after its quarterly profit missed expectations. Shares slid 5.3 percent to end at C$45.13.

Declining issues outnumbered advancing ones on the TSX by 160 to 85, for a 1.88-to-1 ratio on the downside.

The index was posting 13 new 52-week highs. ($1 = 1.3717 Canadian dollars)

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