July 29, 2008 / 8:41 PM / 9 years ago

UPDATE 2-Financials, Teck deal boost Toronto stocks

(Updates closing numbers, adds details)

* TSX gains as financials climb 2.9 percent

* Fording jumps after Teck Cominco’s $14.1 billion bid

* Energy shares retreat along with oil prices

TORONTO, July 29 (Reuters) - The Toronto Stock Exchange’s main index rose on Tuesday as Teck Cominco’s $14.1 billion offer for Fording Canadian Coal Trust and a gain by financials offset a drop by the energy and gold sectors, which followed commodities lower.

Fording FDG_u.TO jumped 7.8 percent after Teck TCKb.TO said it would buy the company in a cash and stock deal, making it the world’s No. 2 exporter of coal used in steel making. Teck shares were up 6 percent.

But the energy sector hampered gains on the Toronto benchmark as oil fell to its lowest level in nearly three months. Among laggards in the oil patch, Canadian Natural Resources (CNQ.TO) gave up 1.8 percent

A stronger U.S. dollar as well as growing worries over world demand for energy saw crude settle down $2.54 at $122.19 a barrel, after sliding as low as $120.42.

The S&P/TSX composite index .GSPTSE closed up 38.59 points, or 0.29 percent, at 13,342.55 with six of its 10 main sectors higher.

Fording was up C$6.55 at C$90.35, while Teck gained C$2.44 to C$42.85.

The banking sector rose, shrugging off news that U.S. investment bank Merrill Lynch MER.N will have to take further writedowns and raise more capital, as investors hoped that financial institutions were getting closer to clearing their balance sheets.

Canadian Imperial Bank of Commerce (CM.TO) was up C$2.87, or 5 percent, at C$60.45, and Toronto-Dominion Bank (TD.TO) gained C$2.01, or 3.4 percent, to C$61.54, while the sector overall added 2.9 percent.

The heavyweight energy group fell 2 percent, with Suncor Energy (SU.TO) off 64 Canadian cents, or 1.2 percent, at C$53.96, and Canadian Natural Resources down C$1.44 at C$77.30.

Gold producers also undermined the index as bullion prices followed oil’s descent. Agnico-Eagle (AEM.TO) was down C$2.92, or 4.9 percent, at C$57.34, while Barrick Gold (ABX.TO) slipped C$1.94, or 4.3 percent, to C$43.50. ($1=$1.02 Canadian) (Reporting by Leah Schnurr; editing by Rob Wilson)

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