TSX ends higher, shrugs off euro zone downgrades

Mon Jan 16, 2012 4:42pm EST
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By Claire Sibonney

TORONTO (Reuters) - Canadian stocks ended slightly higher on Monday as commodity prices rose and markets largely absorbed last week's euro zone ratings downgrades, while investors lacked direction from Wall Street, which was closed for the Martin Luther King holiday.

All three heavyweight sectors - financials, materials and energy - ended firmer.

Among the most influential gainers, Potash Corp (POT.TO: Quote) rallied nearly 2 percent to C$46.67, Suncor Energy (SU.TO: Quote) rose 1 percent to C$32.94 and Provident Energy PVE.TO surged 17.8 percent to C$11.20, after Pembina Pipeline (PPL.TO: Quote) said it would buy the natural gas producer for C$3.24 billion ($3.18 billion).

More broadly, the energy sector, up a modest 0.1 percent, benefited a bit from higher oil prices, driven by growing tensions between Saudi Arabia and Iran. <O/R>

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended up 27.54 points, or 0.23 percent, at 12,258.60 amid light volume - a dull start to the week after a fairly positive start to 2012.

"I think it's typical lackluster action on a day when the U.S. markets are closed, but the comforting thing is that there really hasn't been any drastic or negative impact from the debt downgrades of the European nations that we saw late on Friday," said Elvis Picardo, strategist and vice-president of research at Global Securities in Vancouver.

"The fear was that investors are getting a little too comfortable with the macro risk of sovereign debt ... but having said that we have to wait and see how the U.S. markets will react tomorrow."

Overseas, European shares and the euro also recovered from early losses triggered by Friday's downgrades, but they still looked vulnerable amid rising fears of a disorderly Greek debt default. <MKTS/GLOB>   Continued...