TORONTO (Reuters) - The Toronto Stock Exchange's main index ended slightly higher yesterday as acquisition activity in the energy sector helped offset slumping financials amid nervousness over more casualties from the credit crunch.

Duvernay Oil was the biggest percentage gainer after Royal Dutch Shell agreed to buy the Calgary-based company for about C$5.9 billion ($5.9 billion). Shares of Duvernay soared C$23.56, or 40.3 percent, to C$82.00.

But investor jitters continued to undermine the market, as initial optimism over a proposed US government rescue plan for mortgage finance giants Fannie Mae and Freddie Mac faded amid renewed fears for the health of the US banking sector.

The S&P/TSX composite index closed up 32.19 points, or 0.23 percent, at 13,741.29, but just three of its ten main sectors were higher.

The banks led the way down, sliding 3.2 percent. The sector, which has been beaten up in the wake of the slumping US housing market and resultant credit squeeze, was also hurt by fresh worries in the wake of the collapse of mortgage lender IndyMac Bancorp.

Toronto-Dominion Bank fell C$2.98, or 5.1 percent, to C$55.74, while Bank of Montreal was down C$1.76, or 4.2 percent, at C$40.09.

The energy sector put on 2.6 percent, buoyed by Duvernay's advance. Also in the group, Canadian Natural Resources was up C$4.34, or 4.7 percent, at C$96.84.

Gold producers lifted the materials sector 2.1 percent, while spot gold reached its highest level in nearly four months on worries over the stability of financial markets.

Goldcorp gained C$2.22, or 4.5 percent, to C$51.22, while Agnico-Eagle Mines pushed up C$1.79, or 2.3 percent, to C$78.79.

Other smaller energy companies were lifted by speculation that they could be taken over. Crew Energy Inc., a light-oil and natural-gas producer that more than doubled in value this year before today, rose 14 percent to C$18.90. Birchcliff Energy Ltd., whose biggest shareholder if Canadian billionaire Seymour Schulich, added 12 percent to C$15.20.