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TSX up 0.1%

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Materials falls as copper nears three-month low

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Tenaz Energy ( ATUUF ) to acquire Dutch NAM's offshore assets

(Updated at 10:39 a.m. ET/ 1239 GMT)

By Nikhil Sharma

July 18 (Reuters) -

Canada's main stock index on Thursday rebounded slightly

from the prior session's selloff, as gains in telecom shares

countered losses in the materials sector.

At 10:39 a.m. ET (1439 GMT), the S&P/TSX composite index

was up 0.08% at 22,869.26 points.

Wall Street indexes also stabilized as data showed the

number of Americans filing new applications for unemployment

benefits rose more than expected last week, supporting bets for

U.S. interest-rate cuts this year.

Meanwhile, soft inflation numbers in Canada, higher

unemployment in June and GDP figures for April have all added to

the expectation of the Bank of Canada cutting its rates at the

policy meeting next week.

Market participants are expecting an 87% chance of a

25-basis point rate cut by the Canadian central bank on July 24.

"The BoC does have a tendency to surprise every now and

again, but this time around we believe that the Bank of Canada

will align with the market with regards to rate cut

expectations," said Shailesh Kshatriya, director of Canadian

strategies at Russell Investments Canada.

Telecom shares rose 0.7% to lead sectoral gains

on the Toronto Stock Exchange, followed by the real estate

and financial sectors.

On the flip side, the materials sector dropped 1%

to the bottom of the index as copper prices declined.

Among individual stocks, Tenaz Energy ( ATUUF ) shares jumped

nearly 33% after the energy company signed an agreement to

acquire all issued and outstanding shares of NAM Offshore B.V.

for $180.33 million.