*Energy group higher despite oil price dip
*Nexen rises almost 16.7 pct as takeover rumors emerge
*Trading muted with U.S. markets closed for Thanksgiving (Adds closing numbers, quotes, details)
TORONTO, Nov 27 (Reuters) - The Toronto Stock Exchange’s main index rose on Thursday due to strength in energy and materials issues, raising hopes that the market is near to finding a bottom.
Heavily-weighted stocks that helped the market higher included Potash Corp of Saskatchewan (POT.TO), up 4.5 percent at C$79.69, and Nexen Inc NXY.TO, which was 16.7 percent higher at C$26.01.
Shares of Nexen soared as Canada’s No. 4 independent oil exploration company again had to fend off speculation that it is poised to be purchased by a larger rival. [ID:N27403565]
The materials group rose 3.4 percent as gold firmed on a weaker U.S. dollar. [ID:nLR122834]
The energy sector also was up 3.4 percent even though the price of oil CLc1, at about $53.82 a barrel, was lower on the day.
“They are deeply, deeply oversold here so it’s not surprising that you would see days where they have some fairly significant moves up,” Peter Chandler, senior vice-president at Canaccord Capital in Waterloo, Ontario, said of the two commodity-related sectors.
The moves occurred in a low-volume environment because the U.S. markets were closed for the Thanksgiving holiday.
“There’s also a belief that the markets are trying to put in a bottom,” Chandler said.
The S&P/TSX composite index .GSPTSE was up 110.25 percent, or 1.28 points, at 8,753.77, with six of its 10 main groups higher. It was its fifth straight day of gains.
The market is ignoring relative softness in commodities and there is likely some short-covering going on, said Douglas Davis, chief executive at Davis-Rea.
“If we haven’t seen a bottom here. It may happen in the next three weeks. Somewhere in this period I think we’ll find a a bottom,” Davis said.
$1=$1.23 Canadian Reporting by Jennifer Kwan; editing by Peter Galloway