UPDATE 1-Toronto stocks set to fall after rate held steady

Tue Jun 10, 2008 9:18am EDT
 
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(Updates with rate decision)

*TSX seen falling after rate decision

*Bank of Canada unexpectedly leaves rate steady

*Bernanke's inflation comments could also weigh

*Commodities are mixed; oil price up again

TORONTO, June 10 (Reuters) - The Toronto Stock Exchange's main index was set to fall on Tuesday after the Bank of Canada surprised markets by leaving interest rates steady and signaled the recent spate of cuts may have come to an end.

The TSX had been priced in for a 25 basis-point cut in the key overnight rate, analysts said, but the index could tumble after the central bank held the rate steady at 3 percent to combat inflation. For details, see: [nN10336555]

Adding to the cloudy outlook, global stock markets fell earlier on Tuesday after U.S. Federal Reserve Chairman Ben Bernanke warned that the U.S. central bank work to hold down long-term inflation expectations. His remarks were taken to mean U.S. interest rates may rise later this year.

Commodities were mixed, offering the resource-heavy Canadian benchmark little direction.   Continued...