August 18, 2010 / 6:14 PM / 9 years ago

CANADA STOCKS-TSX advances as gold snaps back, Potash rises

* TSX up 0.5 percent at 11,788.06

* Potash rises 3 pct, BHP to take offer to shareholders

* Gold turns higher, energy cuts losses (Updates to midafternoon)

By Ka Yan Ng

TORONTO, Aug 18 (Reuters) - Toronto’s main stock index was higher on Wednesday afternoon, supported by a turnaround in gold-mining stocks, and with the rise accentuated by hopes of a higher bid for takeover target Potash Corp.

Gold stocks were broadly higher after a soft start, led by Barrick Gold (ABX.TO), up 1.8 percent at C$56.71, while Goldcorp (G.TO) rose 2.8 percent to C$43.49. Agnico-Eagle (AEM.TO) advanced 1.6 percent to C$65.09.

The reversal came as the price of gold rose to a 1-1/2 month high after being lower early in the day, extending a rally to a fifth session after a break above a key technical level triggered a fresh round of aggressive fund buying. [GOL/]

“Gold is moving again. It continues to attract support every time it dips a little bit,” said Elvis Picardo, analyst and strategist at Global Securities in Vancouver.

At 1:55 p.m. (1755 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was up 59.42 points, or 0.5 percent, at 11,788.06, with seven of its 10 main groups higher on the day.

Market focus was on developments in BHP Billiton’s (BHP.AX) BLT.L $39 billion 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 is still on a tear and that’s the highlight of the whole market. The market is assuming a higher price is coming,” said Sal Masionis, stockbroker at Brant Securities.

Potash Corp gained 3 percent to C$151.71.

The energy group continued to weigh on the market, but it cut its losses and was down 0.6 percent as the price of oil trimmed its decline to hold near $75 a barrel.

That helped some key energy issues recover a bit. Suncor Energy (SU.TO) fell 0.8 percent to C$33.24, while fellow oil company Canadian Natural Resources (CNQ.TO) lost 0.75 percent to C$34.48.

An early round of profit-taking had kept the TSX under pressure in the morning after it rallied 1.52 percent on Tuesday.

$1=$1.03 Canadian Reporting by Ka Yan Ng; editing by Peter Galloway

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