TORONTO (Reuters) - The Toronto Stock Exchange's main index edged slightly higher yesterday, lifted by gains in banks and telecom company BCE Inc., but sentiment was wary and the market was unable to find much traction.

The banks led the upside, adding 1.1 percent, with Bank of Montreal rising 93 Canadian cents, or 2.1 percent, to C$45.93, and Bank of Nova Scotia up 78 Canadian cents, or 1.7 percent, at C$46.92.

BCE Inc also supported the benchmark, recovering from Wednesday's sell-off to gain C$1.22, or 3.4 percent, to C$36.94 after US radio operator Clear Channel Communications said it won a temporary court ruling that prevents banks from backing out of their commitments to fund its $20 billion buyout.

After the bell, Canada's telecoms regulator approved the C$34.8 billion ($34.1 billion) buyout of BCE by an investors group, subject to a number of conditions.

BCE had fallen on Wednesday amid worries that its buyout could be on the rocks as some of the banks funding the deal are involved with the Clear Channel buyout, which is reported to be in jeopardy because of the credit crisis.

The S&P/TSX composite index closed up 13.92 points, or 0.1 percent, at 13,405.78 with half of its 10 main sectors on the downside.

It was the fifth day in a row that the index closed higher, but it seesawed through the day in tentative trade.

Lex Kerkovius, senior research analyst at McLean & Partners Wealth Management Ltd. in Calgary, Alberta, said that Bay Street appeared to be seeking direction.

"It's sort of sitting on that knife's edge where nobody quite knows where it's going," Mr. Kerkovius said.

Research In Motion was the biggest weighted drag on the benchmark, shedding C$5.63, or 4.7 percent, to C$114.52, as it was caught up in pessimism over the tech sector south of the border after software firm Oracle Corp reported revenue that fell short of expectations. Toronto's small tech sector was off 0.4 percent.

The materials sector dipped 0.3 percent, hampered by declines in gold producers, with the gold-mining sub-index off 1.8 percent. Yamana Gold was down 89 Canadian cents, or 5.4 percent, at C$15.75, and Agnico-Eagle Mines slipped 73 Canadian cents, or one percent, to C$71.57.