August 25, 2008 / 1:20 PM / 9 years ago

Toronto stocks set for mixed open on commodities

*Oil and gold price to be in focus after Friday’s fall

*Precision Drilling to buy Grey Wolf in $2 bln deal

*Maple Leaf expects meat recall to cost C$20 mln

TORONTO, Aug 25 (Reuters) - The Toronto Stock Exchange’s main index is set for a soft open on Monday, as mixed commodity prices may send the market on a see-saw course, while a $2 billion merger involving Precision Drilling Trust PD_u.TO could provide some direction.

The heavyweight energy sector could get a boost as oil steadied above $115 a barrel after falling more than 5 percent on Friday, the biggest one-day drop since 2004, on rising supply from OPEC, weakening global demand and a rebound in the U.S. dollar.

However, any gains made there could be overshadowed by weakness in materials stocks as gold slipped on a strengthening U.S. dollar. Some base metals sagged on a recovery in the dollar and profit-taking.

“You’ve got mixed numbers on commodities,” said Bob Gorman, chief portfolio strategist at TD Waterhouse. “I don’t think you’ll see a huge move either way.”

The S&P/TSX composite index .GSPTSE begins the week at 13,447.29, after dropping 91.93 points on Friday.

On the merger front, Precision Drilling and Grey Wolf GW.A jointly announced on Monday a cash and stock deal worth about $2 billion, creating one of the largest North American oil and gas rig operators.

As well, Q9 Networks Inc Q.TO, a provider of outsourced data infrastructure, has agreed to be bought by private equity firm Abry Partners in a cash transaction worth about C$361 million, the companies said on Monday.

Financials could see choppy activity ahead of quarterly results this week as Canada’s big six banks are expected to report lower quarterly earnings, largely on weak capital markets activity, higher loan loss provisions and more write-downs.

Investors will likely eye U.S. existing home sales data due later on Monday, said Gorman.

In company news, Maple Leaf Foods (MFI.TO) may see action after it said on Sunday it expects a direct cost of C$20 million from its meat recall linked to listeria bacteria, which has killed at least four people in Canada.

In New York, stock futures pointed to a lower open as oil rose and on nagging credit concerns. ($1=$1.05 Canadian) (Reporting by Jennifer Kwan; Editing by Scott Anderson)

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