August 23, 2010 / 2:56 PM / 8 years ago

CANADA STOCKS-TSX little changed, buoyed by oil, M&A hopes

* TSX up 0.28 percent to 11,755.09

* Energy group rises as oil price firms

* End of Australian mining tax may be near after election

* Potash up 2.1 pct, among big deals in play this month

* Gold miners retreat, price of precious metal steady

By Ka Yan Ng

TORONTO, Aug 23 (Reuters) - Toronto’s main stock index edged higher on Monday morning as oil prices firmed and investor sentiment rose on optimism for several big corporate merger deals.

Mining stocks also got a lift from speculation that Australia’s inconclusive weekend elections could spell the end of a controversial mining tax. [ID:nAUVOTE]

Cameco (CCO.TO) was up 2 percent at C$27.22, while Teck Resources TCKb.TO rose 0.6 percent to C$34.55.

“That Australian election result gave the mining and metals sector a bit of a kick start here,” said Bruce Latimer, trader at Dundee Securities.

“But volumes are light. They’ve been light the last few weeks, and especially on Mondays and Fridays.”

However, gold-mining stocks were among the TSX’s chief decliners, keeping the overall materials group nearly unchanged.

Golds took a breather following gains earlier this month on safe-haven buying, amid uncertainty about the world economic outlook. The price of gold was flat on Monday.

Barrick Gold (ABX.TO) was off 1.15 percent at C$46.36, while Goldcorp (G.TO) slipped 1.16 percent to C$43.43.

At 10:30 a.m. (1430 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was up 33.02 points, or 0.28 percent, at 11,755.09. Eight of the index’s 10 main groups were up, led by a 0.54 percent gain in the hefty energy group.

The price of oil climbed above $74 a barrel on Monday from last week’s six-week low, although bulging U.S. inventories and a lack of storm activity in the Gulf of Mexico limited gains. [O/R]

Suncor Energy (SU.TO) gained 1.01 percent to C$33.01, while Canadian Natural Resources (CNQ.TO) climbed 1.13 percent to C$34.13.

A surge in the outlook for further M&A activity this month has also helped boost equities in Canada and around the world. Thomson Reuters data showed global mergers and acquisitions have hit nearly $200 billion so far in August.[ID:nLDE67M0IJ]

“That’s certainly positive for the underlying market. If people feel credit markets and that are in good shape, that certainly provides a good tone,” said Latimer.

At home, takeover target Potash Corp POT.TO was up 2.1 percent at C$160.33, near its highest level since the No. 1 fertilizer producer was put in play by BHP Billiton’s (BHP.AX) BLT.L $39 billion hostile bid.

Potash Corp. continues to mull its alternatives, and has held discussions with China’s Sinochem Group, a source close to the matter said on Monday. [ID:nN22340110]

Among other key deals in the making was one by Hewlett-Packard (HPQ.N), which has topped a bid by technology rival Dell Inc DELL.O to buy data storage company 3PAR (PAR.N). As well, Campbell Soup Co (CPB.N) may make a $2.3 billion break-up bid for Britain’s United Biscuits, which is owned by private equity firms PAI Partners and Blackstone Group LP (BX.N). [ID:nN23188685] [ID:nLDE67L05L]

Elsewhere, HSBC (HSBA.L) is in talks to buy a stake in South Africa’s Nedbank, while an estimated $58 billion worth of M&A was playing out on Monday in Asia.

$1=$1.05 Canadian Reporting by Ka Yan Ng; editing by Rob Wilson

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