UPDATE 4-Toronto stocks end higher on oils, golds

Mon Jul 14, 2008 5:17pm EDT
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* Index climbs with support from resource sectors

* Duvernay jumps after bid from Royal Dutch Shell

* Financials hurt by U.S. bank worries

By Leah Schnurr

TORONTO, July 14 (Reuters) - The Toronto Stock Exchange's main index ended slightly higher on Monday as acquisition activity in the energy sector helped offset slumping financials amid nervousness over more casualties from the credit crunch.

Duvernay Oil DDV.TO was the biggest percentage gainer after Royal Dutch Shell (RDSa.L: Quote) agreed to buy the Calgary-based company for about C$5.9 billion ($5.9 billion), in a cash offer of C$83 a share, or 42 percent above its Friday close. That suggested shares in the energy shares were undervalued.

But investor jitters continued to undermine the market, as initial optimism over a proposed U.S. government rescue plan for mortgage finance giants Fannie Mae FNM.N and Freddie Mac FRE.N faded amid renewed fears for the health of the U.S. banking sector.

"It's a good step but we have not reached the last step as a solution to this unprecedented challenge that U.S. securities have to deal with," said Clement Gignac, chief economist and strategist at National Bank of Canada in Montreal.   Continued...