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* TSX down 3.44 points, or 0.03 percent, at 11,718.63
* Seven of TSX's 10 main sectors lower
* Potash up 0.7 pct, among big deals in play this month (Adds details, quotes)
By Jennifer Kwan
TORONTO, Aug 23 (Reuters) - Toronto's main stock index ended slightly lower on Monday, weighed down by weakness in gold miners and by investor uncertainty about the economic recovery.
Barrick Gold (ABX.TO) sank 1.1 percent to C$46.38, while Goldcorp (G.TO) fell 1.7 percent to C$43.20 as a firmer greenback kept bullion prices from rising further and gold ended largely flat ahead of key U.S. economic data due later this week. [GOL/]
The broader materials sector fell 0.64 percent.
"Lingering yet waning optimism regarding M&A" kept the TSX above break-even for most of the day, but uncertainty about the economic outlook dragged on investor sentiment, said Rick Meslin, head of Canadian equities at UBS.
"What we're seeing now is people take a little bit of money off," Meslin said. "But for the M&A optimism, I'd expect the market to be a lot lower as average sentiment about whether the recovery is going to be there or not has really not become clear. I'd say sentiment is uncertain at best."
Takeover target Potash Corp of Saskatchewan Inc (POT.TO), a top net gainer, climbed 0.7 percent to C$158.17.
The No. 1 fertilizer producer was put in play by BHP Billiton's (BHP.AX) (BLT.L) $39 billion hostile bid. Potash continues to mull its alternatives and has held discussions with China's Sinochem Group, a source close to the matter said on Monday. [ID:nN23166531]
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE finished the session down 3.44 points, or 0.03 percent, at 11,718.63. Seven of the index's 10 main groups were lower.
Elvis Picardo, an analyst and strategist at Global Securities in Vancouver, said there was little direction either way in the market on Monday as there is "a bit of a news vacuum here and you still have a very uncertain environment." But he noted investors were putting money in defensive stocks such as telecoms.
"You're still having a lot of uncertainty on the back of some really soft economic numbers in recent weeks. And you're also heading into a time of year when volatility peaks in the equity markets," he said.
"What I'm noticing is that investors are gravitating to stocks that pay really good dividends."
Pipeline company Enbridge Inc (ENB.TO), which ships the bulk of Canada's oil exports to the United States, climbed 1 percent to C$52.25.
The blue chip S&P/TSX 60 index .TSE60 closed 0.33 of a point higher, or 0.05 percent, at 683.04.
$1=$1.05 Canadian Reporting by Jennifer Kwan