Toronto stocks set for mixed open on commodities

Mon Aug 25, 2008 9:15am EDT
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*Oil and gold price to be in focus after Friday's fall

*Precision Drilling to buy Grey Wolf in $2 bln deal

*Maple Leaf expects meat recall to cost C$20 mln

TORONTO, Aug 25 (Reuters) - The Toronto Stock Exchange's main index is set for a soft open on Monday, as mixed commodity prices may send the market on a see-saw course, while a $2 billion merger involving Precision Drilling Trust PD_u.TO could provide some direction.

The heavyweight energy sector could get a boost as oil steadied above $115 a barrel after falling more than 5 percent on Friday, the biggest one-day drop since 2004, on rising supply from OPEC, weakening global demand and a rebound in the U.S. dollar.

However, any gains made there could be overshadowed by weakness in materials stocks as gold slipped on a strengthening U.S. dollar. Some base metals sagged on a recovery in the dollar and profit-taking.

"You've got mixed numbers on commodities," said Bob Gorman, chief portfolio strategist at TD Waterhouse. "I don't think you'll see a huge move either way."

The S&P/TSX composite index .GSPTSE begins the week at 13,447.29, after dropping 91.93 points on Friday.

On the merger front, Precision Drilling and Grey Wolf GW.A jointly announced on Monday a cash and stock deal worth about $2 billion, creating one of the largest North American oil and gas rig operators.   Continued...