Canadian stocks closed slightly higher on Monday, as gains by energy and mining stocks offset lower financial stocks, while traders shrugged off the downgraded rating of eurozone economies last week and focused on Greece's difficulties in carrying out a deal with private creditors.

The S&P/TSX Composite Index was up 27.54 points, or 0.23 percent, at 12,258.60 while the S&P/TSX Venture Composite Index gained 2.90 points, or 0.19 percent, at 1,538.93.

Analysts said that the S&P downgrades, officially announced last Friday after markets closed, had been widely expected, especially in the bond markets. There was little shock at S&P's announcement to strip France of its treasured triple-A rating and to cut its view on a raft of other euro countries, including Italy.

But one bright spot was that Germany, Europe's biggest economy, retained its triple-A rating and had its outlook upgraded to stable from negative.

Also, on Monday, rival ratings agency Moody's said it is maintaining France's top-tier AAA credit rating for now with the outlook stable. S&P rates France's outlook as negative.

A bigger headache for the markets at the moment is whether Greece can manage a deal with its creditors. Last October, Greece' s partners in the eurozone sanctioned a deal whereby Greece's creditors agreed on a deal to reduce the value of their Greek debt holdings so that the country's debt burden is reduced.

Energy shares were lifted by stronger oil prices on Monday as crude oil prices rose above 111 U.S. dollars a barrel on worries over supply disruptions after Iran warned its Gulf neighbors of consequences if they raised oil output to replace Iranian barrels facing international sanctions.

Provident Energy led the sector's gains, rising more than 16 percent to 11.05 Canadian dollars after Pembina Pipeline said on Monday it would buy the natural gas producer for 3.24 billion Canadian dollars.

The heavily-weighted materials sector was boosted to rise 0.63 percent, as bullion prices were supported by the euro's rise off 17-month lows and a survey showed that miners expect the price of gold to continue climbing in 2012 and peak around 2,000 U.S. dollar an ounce.

Market attention is likely to switch on Tuesday to the state of the eurozone's economy with the latest ZEW Center for European Economic Research survey on the health of the German economy.

Statistics Canada reported this morning that November new motor vehicle sales dipped 1 percent to 137,640 units, partially offsetting gains registered in September and October. Sales fell for both trucks and passenger cars.

Elsewhere, the Canadian Real Estate Association reported this morning that national resale housing activity posted a 1.8 percent increase from November to December in 2011, the fourth straight monthly increase.

On the currency front, the Canadian dollar rose 0.63 cents to 98.24 U.S. cents, a day before the Bank of Canada makes its next announcement on interest rates. The central bank is widely expected to keep its key rate at 1 percent. One U.S. dollar was buying 1.0230 Canadian dollars at 5 p.m. local time (2200 GMT) on Monday, compared with one U.S. dollar purchasing 1.0223 Canadian dollars last Friday.