* TSX slips 0.14 percent to 11,711.86
* Potash Corp. up 3 pct, BHP to take offer to shareholders
* Energy decline is main drag as oil prices weaken (Adds details)
By Ka Yan Ng
TORONTO, Aug 18 (Reuters) - Toronto’s main stock index was lower on Wednesday morning on a steep drop in energy shares but the fall was limited by strength in $39-billion takeover target Potash Corp.
The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was down 16.78 points, or 0.14 percent, at 11,711.86, after briefly popping into positive territory.
Seven of the index’s 10 main groups were lower, with a 0.96 percent drop in the energy group, due to a falling oil price, providing the main drag on the index.
Oil prices fell to a one-month low below $75 after an industry report on Tuesday showed a sharp increase in petroleum inventories in the United States. [O/R]
“One of the big things is the price of oil is down dramatically today. Gold’s off over $5 too. It’s just general malaise about the market,” said Sal Masionis, stockbroker at Brant Securities.
“But Potash is still on a tear and that’s the highlight of the whole market. The market is assuming a higher price is coming.”
Market focus was on developments in BHP Billiton’s (BHP.AX) BLT.L attempt to buy Potash Corp POT.TO. BHP said it would take its $130-a-share offer directly to shareholders, bypassing Potash Corp’s board, which a day earlier called the bid “grossly inadequate”. [ID:nSGE67H031]
Potash Corp gained 3.1 percent to C$151.92.
The Potash news helped keep the index’s materials group higher, up 0.4 percent, but an easing price of gold after its recent rally weighed on key gold-mining stocks. Barrick Gold (ABX.TO) was down 0.33 percent at C$45.73, while Kinross (K.TO) fell 0.45 percent to C$15.57.
Analysts also said there was some profit-taking at play after the TSX rallied 1.52 percent on Tuesday and touched its firmest level in nearly a week.
“Yesterday was a big up day so maybe people are just taking some profits here,” said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.
$1=$1.03 Canadian Reporting by Ka Yan Ng; editing by Peter Galloway