Toronto stocks set for downdraft after recent rise

Wed Apr 9, 2008 9:06am EDT
 
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TORONTO, April 9 (Reuters) - The Toronto Stock Exchange's main index was set to ease slightly on Wednesday, with cool commodities and fresh concern over the world's financial institutions taking a toll on recent confidence.

Gold stocks, which led the fall the day before, may add to their losses as spot bullion prices fell $6 to below $910 an ounce. And crude oil, another bellwether for the resource-heavy TSX, was off 30 cents in futures trade.

The S&P/TSX composite index .GSPTSE snapped a six-day winning streak in the previous session, and there was little in the way of corporate news to lift its prospects on Wednesday.

It starts the day at 13,727.53 after slipping 17.48 points, or 0.1 percent, on Tuesday. Still, it has climbed more than 8 percent in the last 13 sessions.

Joe Ismail, technical analyst at Maison Placements Canada, said the TSX is facing some resistance at the 14,000-point level -- which it has approached four times in the last five months, but was unable to significantly break through.

"I expect the market to trace back a bit here. But in the short term, 13,000 will be a good support level," Ismail said.

European stocks stumbled early on Wednesday, stung by concern over global financial institutions after the IMF warned on Tuesday losses in the sector might near $1 trillion.

However Citigroup (C.N: Quote), the largest U.S. bank by assets, may bring some cheer later in the session after news that it is close to a deal to sell some $12 billion of leveraged loans and bonds.

($1=$1.02 Canadian) (Reporting by Jonathan Spicer; Editing by Scott Anderson)