February 9, 2011 / 4:01 PM / in 7 years

CANADA STOCKS-TSX eases, mixed earnings offset TMX deal

* TSX down slightly, off 0.09 percent at 13,879.9

* TMX shares surge on potential LSE tie-up

* Six sectors advance but materials weigh

* WestJet jumps 8.5 pct as earnings double (Adds details)

By Ka Yan Ng

TORONTO, Feb 9 (Reuters) - Toronto’s main stock index was slightly lower on Wednesday morning as a gain in TMX Group (X.TO) shares on a proposed deal for the London Stock Exchange to buy the owner of the Toronto Stock Exchange was balanced by mixed earnings reports and some declining commodity prices.

At 10:32 a.m. (1532 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was down 12.61 points, or 0.09 percent, at 13,879.91, but still not far off the 2-1/2 year high of 13,909.84 that it hit on Tuesday.

Shares of TMX Group jumped more than 11 percent to C$45 on news that it is in advanced talks to be taken over by the LSE to create the world’s fourth-largest stock exchange operator and a top centre for trading mining and energy shares. TMX also said on Wednesday that it swung to a profit in the fourth quarter from a year-earlier loss. [ID:nTZO9DE7MM] [ID:nLDE71808S]

“The big story doesn’t have much impact on the S&P/60 (blue-chip index),” said Francis Campeau, broker at MF Global Canada in Montreal, noting that market players were watching whether the TMX deal develops into “another Potash story.” Potash Corp (POT.TO) was a big takeover target last year, but Ottawa blocked BHP Billiton’s hostile bid for the Canadian fertilizer producer.

Earnings news had more impact on index heavyweights than the TMX deal.

Agrium (AGU.TO) was one of the strongest advancers, up 3 percent at C$95.67, after the company, a fertilizer producer and North America’s biggest farm products retailer, said its fourth-quarter profit surged. It credited high grain prices, which it said fueled a surge in demand for fertilizer and other farm inputs. [ID:nN09112664]

Fellow fertilizer producer Potash Corp was up 0.6 percent at C$181.48, boosted by bullish data from the U.S. Agriculture Department. [ID:nLDE7181WN]

Teck Resources TCKb.TO was a hefty decliner, tumbling 5 percent to C$60.03 as the price of copper fell and on some disappointment over the diversified miner’s quarterly earnings, released after the market close on Tuesday. [ID:nN08274685] [MET/L]

Overall, six of the index’s 10 main groups were higher. A 0.7 percent drop in the materials group was the main drag.

WestJet Airlines Ltd (WJA.TO) jumped more than 8.5 percent to C$14.33 after the carrier said fourth-quarter profit more than doubled. [ID:nN04206947]

$1=$0.99 Canadian Reporting by Ka Yan Ng; editing by Peter Galloway

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