Toronto stocks to rebound as central banks soothe
TORONTO, March 11 (Reuters) - The Toronto Stock Exchange's main index was set to rebound on Tuesday, emboldened by bullish commodity prices and word from the U.S. Federal Reserve that it would work in tandem with other central banks to add liquidity to credit markets.
Investors will also assess wireless applications by Manitoba Telecom Services MBT.TO and Shaw Communications Inc SJRb.TO, which were submitted after the close of markets on Monday.
The main index tumbled more than 2 percent in the previous session, gripped by worries over the credit crunch. But those concerns were seen easing on Tuesday as the Fed, the Bank of Canada and other central banks said they would move to prop up faltering credit markets. For details, see: [nN11554808]
Asian and European stocks jumped sharply on the news, and U.S. stock futures pointed higher.
TSX bellwethers gold, copper, oil and natural gas all rose in early trade. Benefiting from a weaker U.S. dollar, crude oil futures climbed $1.50 to above $109 a barrel while spot gold added more than $10 to above $984 an ounce.
The influential TSX energy and materials groups could also benefit from bargain hunting after leading the fall on Monday.
In the TSX telecoms sector, MTS revealed a surprise partnership with Canada Pension Plan Investment Board and U.S. private-equity firm Blackstone Group (BX.N: Quote). The three aim to form Canada's fourth national wireless company.
"While Blackstone and CPP have big chequebooks, given the lack of a strategic partner, this announcement may be viewed by the market as somewhat disappointing," Dvai Ghose, analyst at Genuity Capital Markets, wrote in a research note.
Cable and satellite-TV firm Shaw also submitted an application to Industry Canada ahead of a wireless spectrum auction. For details, see: [nN10495336]
The S&P/TSX composite index .GSPTSE starts the day at 13,005.09 after dropping 276.63 points, or 2.1 percent, in the previous session. The index is at its lowest level in about a month.
($1=$0.99 Canadian) (Reporting by Jonathan Spicer, editing by Mario Di Simine)
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