(Updates at market close)

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TSX ends up 0.4% at 29,179.39

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Eclipses Tuesday's record closing high

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Energy gains 1.9% as oil settles up 1.7%

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Materials group adds 1.9%

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 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 settled 1.7% higher at $63.67 a

barrel, boosting the energy sector. It was up 1.9%,

helped by a gain of 4.9% for Cenovus Energy ( CVE ).

Cenovus does not plan to raise its bid for oil sands

producer MEG Energy ( MEGEF ) despite a higher offer from

Strathcona Resources ( STHRF ), its CEO told Bloomberg News.

The materials group, which includes metal mining

shares, added 1.6% as copper prices climbed and the price

of gold 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 and Canada's Teck Resources ( TECK )

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.