Canada's commodities-heavy main stock index inched toward record highs on Monday as oil prices rebounded from a seven-day losing streak, while shares of drug developer Trillium nearly tripled on its acquisition by US pharma major Pfizer.

By 09:56 a.m. ET (13:56 GMT), the Toronto Stock Exchange's S&P/TSX composite index was up 49.72 points, or 0.24%, at 20,388.74, with the surge in Trillium lifting the healthcare index to a two-week high.

Energy stocks bounced 3.6% after sliding 6.5% last week, when worries about slowing economic growth in China and the United States had sent ripples through global markets.

"We believe that common stocks are relatively attractive," said Irwin Michael, portfolio manager at ABC Funds.

Pfizer to buy cancer drug developer Trillium in $2.3bn deal

"Growth may be slackening off from the highs of the recovery from the pandemic, but there's still pretty good growth."

The US S&P 500 also rebounded on Monday after snapping a two-week winning streak, even as data showed US business activity growth slowed for a third straight month in August.

HIGHLIGHTS

The materials sector, which includes precious and base metals miners and fertilizer companies, added 1.4% as gold futures rose 1.2% to $1,802.5 an ounce.

Crescent Point Energy Corp was the second-biggest gainer on the TSX, after Trillium.

Discount retailer Dollarama Inc, on the other hand, led the decliners, with a 2.9% fall. IT services firm CGI Inc was the second biggest decliner.

Oil jumps 5% on weaker dollar after seven days of losses

The most heavily traded shares by volume were Fortis Inc , Sun Life Financial and Hexo Corp.

The TSX posted 15 new 52-week highs and no new low.

Across all Canadian issues there were 86 new 52-week highs and six new lows, with total volume of 52.43 million shares.