Toronto stocks to bounce back from steep drop

Wed Jun 11, 2008 9:10am EDT
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*Firm commodities to provide lift

*Agrium boosts profit outlook

*Forzani swings to loss

TORONTO, June 11 (Reuters) - The Toronto Stock Exchange's main index was seen bouncing back on Wednesday from a thumping in the previous session, with the help of rising commodities and a higher profit outlook from heavyweight listing Agrium Inc (AGU.TO: Quote).

After plunging more than 220 points, the Canadian benchmark was set to get a lift from its resource sectors as key commodities oil, gas, gold and most base metals advanced.

In the materials sector, investors will weigh news that Agrium, the world's No. 3 nitrogen producer, expects to earn more than previously expected in the second quarter -- but also that it faces delays and a potential credit default at a project in Egypt. For details, see: [nN11422971]

The fertilizer-agriculture sector "has been one of the best-performing sectors of both the Canadian and the U.S. market ... with even the mid-tier stocks getting dragged along to the upside," said Bruce Latimer, trader at Dundee Securities, who noted Agrium shares were trading higher in pre-market action.

U.S. crude oil futures were up about 2 percent at $133.92 a barrel ahead of weekly data on U.S. energy inventories, which usually affects TSX energy stocks.

Spot gold was up about $8 an ounce, following the lead of oil.   Continued...