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A clinical technician holds a tray of Allergan Botox boxes, produced by Allergan Inc., in this arranged photograph taken at a skin and beauty clinic in London, U.K., on Monday, Nov. 17, 2014. Actavis Plc agreed to pay about $66 billion for Allergan Inc., a deal that creates a new top 10 drugmaker and ends Valeant Pharmaceuticals International Inc.'s attempt at a hostile takeover of the maker of Botox.Jason Alden/Bloomberg

The Toronto stock market added to a strong showing last week in early trading Monday amid major merger and acquisition activity in North America.

The S&P/TSX composite index rose 73.14 points, or 0.49 per cent, to 14,916.24 on top of a one per cent gain last week.

American botox maker Allergan reached a friendly deal to be acquired by drug company Actavis in a deal valued at $66-billion (U.S.), which trumps a hostile offer by Quebec-based Valeant Pharmaceuticals. Allergan shareholders will receive about $219 in cash and stock. Valeant's most recent bid was valued at $53-billion, but the company said Monday it couldn't justify matching the Actavis offer. Valeant shares rose 28 cents to $151.75.

Traders also considered the combination of two of the world's biggest oilfield services companies. Halliburton will buy Baker Hughes for in a deal worth more $34.6-billion.

The TSX was held back by resource stocks as commodity prices fell following the release of data showing Japan's economy unexpectedly slipped back into recession during the third quarter. The world's third-largest economy contracted at a 1.6 per cent annual pace as housing and business investment dropped following a sales tax hike.

The Canadian dollar fell back 0.34 of a cent to 88.34 cents (U.S.).

U.S. indexes were mostly higher as the Japanese data sparked a fresh round of concern about the health of the global economy. The Dow Jones industrials gained 12.20 points, or 0.07 per cent, to 17,646.94, the Nasdaq was down 4.57 points to 4,683.97 while the S&P 500 index 1.68 points to 2,038.14.

The timing of interest rate hikes in the U.S. was also in focus. Federal Reserve governor Jerome Powell said during an interview on CNBC that the first rate hike will likely come in 2015 perhaps around mid-year.

Energy was also a major focus for the start of the week after concerns about demand and global oversupply pushed crude to below $75 for the first time in four years. On Monday, the December contract in New York was down down 91 cents to $74.91 and the TSX energy sector was down 0.6 per cent.

Also, the Republican-controlled U.S. House of Representatives passed legislation in favour of building TransCanada's Keystone XL pipeline on Friday. And supporters in the Democratic-run Senate predicted they will get the 60 votes needed to pass it this week. However, U.S. president Barack Obama could veto the bill and it is highly uncertain if the Senate or House will have the two-thirds majorities that would be needed to override a veto. TransCanada was up 66 cents to $56.46 (Canadian).

The gold sector fell about 0.65 per cent while December gold ticked 80 cents higher to $1,186.40 (U.S.).

The base metals component was off 0.15 per cent while December copper edged one cent lower to $3.03.

Consumer staples, telecoms and financials were in the positive column.

On the economic front, it is expected that falling energy prices will manifest themselves in the latest inflation readings coming out this week.

In Canada, Statistics Canada is expected to report Friday that its October Consumer Price Index declined by 0.2 per cent during October following a slight 0.1 per cent rise in September. Gasoline prices fell over one per cent annually through October.

Economists expect to see the U.S. CPI ease by 0.1 per cent for October.

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