CANADA STOCKS-TSX extends record-setting run as resource shares climb

By Fergal Smith

TORONTO, Sept 10 (Reuters) - Canada's main stock index rose to another record high on Wednesday, as higher commodity prices boosted resource shares one day after the announcement of the second-largest M&A deal ever in the mining sector.

The S&P/TSX composite index .GSPTSE ended up 116.38 points, or 0.4%, at 29,179.39, eclipsing Tuesday's record closing high.

"It's nice to see this rotation with a lot more excitement around the commodity space," said Greg Taylor, chief investment officer at PenderFund Capital Management. "Commodities are definitely acting well."

The price of U.S. oil CLc1 settled 1.7% higher at $63.67 a barrel, boosting the energy sector .SPTTEN. It was up 1.9%, helped by a gain of 4.9% for Cenovus Energy CVE.TO.

Cenovus does not plan to raise its bid for oil sands producer MEG Energy MEG.TO despite a higher offer from Strathcona Resources SCR.TO, its CEO told Bloomberg News.

The materials group .GSPTTMT, which includes metal mining shares, added 1.6% as copper HGc1 prices climbed and the price of gold XAU= held near a record high. Softer-than-expected U.S. inflation supported expectations the Federal Reserve will resume interest rate cuts at a policy decision next week.

The $53  billion planned merger between London-listed miner Anglo American AAL.L and Canada's Teck Resources TECKb.TO announced on Tuesday marks a breakthrough after years of failed mining sector consolidation attempts and could spur their rivals to action.

"The pain trade is higher because a lot of people are bearish or in cash, and the market going up is making it more painful for people," Taylor said.

Heavily weighted financials added 0.4% but six of the 10 major sectors ended lower, including a decline of 0.6% for technology.