Toronto stocks drop as bank results offset rate cut

Tue Mar 4, 2008 9:47am EST
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TORONTO, March 4 (Reuters) - Toronto's main stock index slipped at the open on Tuesday as disappointing results from two of the country's biggest banks overshadowed another interest rate cut by the Bank of Canada.

Just after the open, the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was down 9.81 points at 13,534.57.

Eight of the TSX index's 10 main groups were lower, led by a 1.5 percent decline in the heavily weighted financial group and a 0.4 percent drop in the rate-sensitive utilities group.

Bank of Montreal BMO.TO dropped C$1.86 to C$46.50, while Bank of Nova Scotia BNS.TO fell 65 Canadian cents to C$45.85.

Bank of Montreal's first-quarter earnings fell 27 percent as it took writedowns of C$362 million after tax for trading and valuation-related items in capital markets, and made a higher allowance for credit losses.

Bank of Nova Scotia said its first-quarter earnings dropped 18 percent amid substantial volatility in global financial markets.

The banks' results offset firm resource prices - oil and gold prices were just below record highs.

Gold miner Agnico-Eagle Mines AEM.TO was up C$2.25 at C$72.90.

The Bank of Canada slashed its overnight interest rate on Tuesday by half a percentage point for the first time since November 2001, lowering it to 3.50 percent and signaling further cuts to shield the economy from the damaging effects of the U.S. economic slowdown. ($1=$0.99 Canadian) (Reporting by Scott Anderson; Editing by Bernadette Baum)