UPDATE 2-Toronto stocks climb, but off earlier high

Tue Mar 11, 2008 1:45pm EDT
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TORONTO, March 11 (Reuters) - The Toronto Stock Exchange's main index backed off its earlier high on Tuesday as gains made shortly after a coordinated move by central banks to help ease liquidity strains opened the door to profit taking.

The S&P/TSX composite index .GSPTSE was up 177.02 points, or 1.36 percent, at 13,182.11, by early afternoon after racing ahead 273.56 points, or 2.1 percent, to 13.278.65 moments after the markets opened.

The early gain was backed by news of a joint plan by the Bank of Canada and other central banks to inject liquidity into faltering world credit markets. The U.S. Federal Reserve said it would add up to $200 billion to strained credit markets.

But the coordinated effort by the central banks to try and calm credit fears was not enough to keep Toronto's benchmark from handing back nearly half its gains as the session wore on.

"I think it got a little too carried away and I'm not sure that what the Fed has done is necessarily going to change much," said John Kinsey, portfolio manager at Caldwell Securities Ltd.

The materials sector charged 2.9 percent higher, followed by 1 percent gains in the heavily weighted energy and financial sectors. Seven of the TSX's 10 subindexes were higher.

The TSX index fell 2.1 percent in the previous session. (Reporting by Frank Pingue, editing by Mario Di Simine)