TORONTO (Reuters) - The Toronto Stock Exchange's main index ended slightly higher in light volume yesterday as the energy sector pushed up amid gains by oil and a report that Talisman Energy could be an acquisition target.

Shares of Talisman climbed C$1.51, or 6.5 percent, to C$24.70 following a newspaper report that Chinese oil firm CNOOC Ltd was considering a bid for the Canadian company or some of its assets.

"Talisman in our view has been an undervalued company," said Michael Sprung, president at Sprung & Co. Investment Counsel. "We don't find it surprising that people might be taking a look at it — it's got a very strong balance sheet, good properties and good prospects."

Overall, the energy sector was up 0.5 percent, as oil rose to around $133 a barrel after an attack on a pipeline in Nigeria, while long-term supply concerns remained.

The S&P/TSX composite index closed up 35.21 points, or 0.24 percent, at 14,758.57 after a day of light action as US and UK markets were closed for holidays. All but two of the index's 10 main sectors drifted higher.

Elsewhere in the oil patch, Imperial Oil added 23 Canadian cents, or 0.4 percent, to C$59.09, and Suncor Energy rose 90 Canadian cents, or 1.3 percent, to C$71.24.

On the downside, the tech sector dipped 0.3 percent, with MacDonald, Dettwiler and Associates Ltd off 81 Canadian cents, or 1.9 percent, at C$40.88, and heavyweight Research In Motion sliding 74 Canadian cents, or 0.6 percent, to C$129.06.

The mining subindex also stumbled, falling 0.5 percent, but its larger materials group eked out a tiny gain of 0.02 percent with help from Potash Corp of Saskatchewan, which rose C$1.48, or 0.8 percent, to C$195.88.

Analysts said that all eyes will be on the banking sector this week as major institutions will be reporting results, starting with Bank of Nova Scotia and Bank of Montreal today.

The banking sector has been stung by fallout from the credit crunch and the sagging US housing market, but the losses have come in well below the massive hits taken by US and global banks.