July 21, 2008 / 2:19 PM / 9 years ago

UPDATE 1-Toronto stocks rise on TransAlta bid, bank results

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TORONTO, July 21 (Reuters) - Toronto’s main stock market index climbed 1 percent at the open on Monday before giving back some gains, as a takeover bid for TransAlta Corp (TA.TO) and stronger-than-expected results from Bank of America (BAC.N) soothed worries over the global credit crunch.

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was up 88.72 points, or 0.7 percent, at 13,604.68 after climbing as high as 13,687.13 near the start.

Power generator TransAlta jumped 16.9 percent to C$37.70 after U.S.-based LS Power Equity Partners and Global Infrastructure Partners said on Monday that they would buy all the outstanding shares of TransAlta in an all-cash bid.

The offer represents a 21-percent premium to TransAlta’s closing price on Friday of C$32.25.

TransAlta’s impressive ascent propelled the utilities sector up 5.2 percent.

“This shows that there is some liquidity for deals like that to be done,” said Steve Ibel, an institutional equities trader at Beacon Securities, in Halifax, Nova Scotia.

Overall, five of the TSX index’s 10 main groups were higher. The heavily weighted financial group was up 0.5 percent, the resource-heavy materials group added 0.7 percent and the information technology group gained 1.2 percent.

Among the companies showing leadership were Potash Corp (POT.TO), which added C$3.29 to C$214.45 and Research In Motion RIM.TO, which was up C$2.19 at C$115.94.

Most of Canada’s biggest banks climbed after results from Bank of America (BAC.N), the second-largest U.S. bank, topped expectations, reassuring investors that some financial institutions were coping with the credit crisis.

On Friday, Citigroup (C.N), the largest U.S. bank by assets, reported a smaller-than-expected loss, helping to lift investor confidence in the financial markets.

Royal Bank of Canada (RY.TO), the country’s biggest bank, added 31 Canadian cents to C$45.01 and Toronto-Dominion Bank (TD.TO) gained 66 Canadian cents to C$59.19.

A 0.5 percent drop in the influential energy group and a 0.6 percent dip among consumer staples tempered the broader gains. Grocer George Weston Ltd (WN.TO) was off C$1.09 at C$45.33.

Energy shares slipped, with Niko Resources NKO.TO, which was off C$1.93 at C$79.62, leading declines as U.S. crude oil prices pulled away from session highs to trade around $129.14 a barrel. ($1=$1.00 Canadian) (Reporting by Scott Anderson; Editing by Bernadette Baum)

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