Toronto stocks to open soft, resources, rate eyed

Wed Sep 3, 2008 8:53am EDT
 
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*Oil slips as slowing demand in U.S. weighs

*Gold and base metals mixed amid bargain-hunting

*Forzani may be in spotlight after results

TORONTO, Sept 3 (Reuters) - The Toronto Stock Exchange's main index is set for a soft open on Wednesday on a mixed picture in commodities. Markets will watch the Bank of Canada's interest rate decision for clues on the health of the economy.

The key energy sector, which slumped 6.5 percent on Tuesday as oil tumbled, is expected to drag on the market as oil extended its losses. Materials, which sank 5.9 percent on Tuesday, could also weigh on the market.

Together, the two sectors account for about half of the benchmark index's total weight and typically drive market direction.

"We're going to open on the weak side," said Joe Ismail, technical analyst at Maison Placements Canada. "By the end of the day, probably, you'll see some bargain-hunting stepping in picking at some of the favorites."

After Tuesday's tumble, there are "excellent" buying opportunities, added Ismail.

The S&P/TSX composite index .GSPTSE begins the day at 13,299.54, down 471.71 points, or 3.43 percent. It was the biggest one-day percentage loss since January when Bay Street was pummeled by fears over the U.S. economic outlook.   Continued...