Toronto stocks seen rising after consecutive drops

Thu Sep 4, 2008 9:17am EDT
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* Rising gold and oil prices could buoy resource issues

* Borealis offer for Teranet may stir investors

TORONTO, Sept 4 (Reuters) - Toronto's main stock market index was seen opening on a positive note on Thursday, buoyed by firm commodity prices, as it recoils from two days of steep losses.

Merger and acquisition activity could also help jump start the market after Borealis Infrastructure said on Thursday it planned to offer more than C$2 billion ($1.9 billion) in cash for Teranet Income Fund TF_u.TO.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE begins the day 13,137.72 following a loss of more than 160 points in the previous session when it was yanked lower by mounting concerns over falling demand for commodities.

Wednesday's loss followed on the heels of a massive 471 point loss on Tuesday.

But the resource-heavy index is expected to bounce back on Thursday as the prices for the key commodities, including U.S. crude oil and gold recover.

"It should be a bounce today. The market is very much oversold," said John Ing, president at Maison Placements Canada. "Toronto has been under heavy, heavy selling."

Canada's energy companies, which account for about 30 percent of the market's overall weighting, are expected to benefit from a rebound in the U.S. crude price.   Continued...