Toronto index set for mixed open as oil, banks duel

Tue Apr 15, 2008 8:58am EDT
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TORONTO, April 15 (Reuters) - Toronto stocks were set for a mixed opening on Tuesday as record oil and firm metal prices boost resource shares, but that could be offset by worries about the health of the U.S. economy weighing on financial issues.

U.S. crude oil rose to a lifetime high above $112 a barrel as investors sought to hedge against a battered dollar.

Meanwhile, gold climbed more than 1 percent on the back of the record oil price and a weaker U.S. dollar.

"There is good upside this morning as the key commodities are up across the board. It should be a good start for the TSX," said Luc Girard, director of the portfolio advisory group at Desjardins Securities in Montreal.

"The oil and materials should go up, but on the other side the financial should continue to lag."

The energy and financial sectors account for about 50 percent of the TSX index's overall weighting.

Heavily weighted financial shares have been battered in the past few sessions as disappointing results south of the border and mixed economic data has exacerbated worries about the health of the U.S. economy.

"The liquidity crisis is not over yet. We have a lot of work to do on the financial side and that will continue to weigh on the TSX," Girard said.

The financials suffered on Monday after Wachovia WB.N, the fourth-largest bank in the United States, reported an unexpected first-quarter loss and said it would cut its dividend and raise capital.   Continued...