A major acquisition in the health-care sector helped give the Toronto stock market a small advance in early trading Monday.
The S&P/TSX composite index gained 13.18 points to 12,680.4 as Valeant Pharmaceuticals confirmed that it plans to expand its eye-care business by buying Bausch and Lomb for $8.7-billion (U.S.) in cash.
The Montreal-area company will finance the deal by issuing up to $2-million of new equity, with the remainder paid for with debt.
Valeant stock was up $5.98 or 6.87 per cent to $93 after earlier hitting an all-time high of $95. Its shares had risen 13 per cent on Friday on speculation the deal was set to go through.
The Canadian dollar was off 0.04 of a cent to 96.85 cents US amid mixed commodity prices and traders looked to the Bank of Canada’s latest announcement on interest rates.
The Bank of Canada makes its next announcement Wednesday, the last such word on rates from outgoing central bank governor Mark Carney. Analysts expect the bank will leave its key rate unchanged.
U.S. markets are closed for Memorial Day.
The gold sector also helped lift the TSX, up 0.5 per cent as June bullion gained $7.70 to $1,394.30 (U.S.) an ounce.
Barrick Gold Corp. gained 24 cents to $19.93. The stock fell two per cent Friday on news that an environmental regulator in Chile has stopped construction and imposed sanctions on the miner’s $8.5-billion Pascua-Lama project, citing “serious violations” of its environmental permit.
The base metals sector was slightly lower while July copper added a penny to $3.31 (U.S.) a pound.
The energy sector slipped 0.2 per cent as concerns about global energy demand sent the July crude contract down 51 cents to $93.64 a barrel in electronic trading on the New York Mercantile Exchange.
Consumer staples also weighed on the TSX with grocer Metro Inc. down 81 cents to $69.29.
Traders also took in another big slide on the Tokyo stock market.
Tokyo’s Nikkei 225 tumbled 3.2 per cent as its export sector was hit with wide-ranging losses amid a rising yen.
The Japanese benchmark has been on a tear, rising 36 per cent since the beginning of the year. At the same time, the yen has fallen steadily against other major currencies in a byproduct of the economic stimulus policies launched this year by Prime Minister Shinzo Abe. He’s embarked on an aggressive campaign to lift consumer prices and encourage borrowing and spending.
As part of that effort, Japan’s central bank is flooding its financial system with money, helping reduce the value of the yen. The yen reversed some of its recent declines Monday after reaching 103 to the U.S. dollar last week.
The TSX finished last week with a modest gain as hopes for a global economic recovery faded somewhat amid a survey on China’s monthly manufacturing pace which showed a bigger-than-expected decline.
Less-than-clear indications from the U.S. Federal Reserve on whether it might scale back its aggressive bond-buying program, dubbed quantitative easing or QE, also caused investors to curb their enthusiasm and New York’s Dow Industrials registered a small loss for last week.
Elsewhere in Asia, Hong Kong’s Hang Seng rose 0.3 per cent, South Korea’s Kospi gained 0.3 per cent while benchmarks in mainland China and Taiwan rose. Australia’s S&P/ASX 200 declined 0.5 per cent.
In Europe, Frankfurt’s DAX and the Paris CAC 40 rose about 0.8 per cent while London markets were closed for a spring Bank Holiday.