CANADA STOCKS-TSX rises before Fed rate decision, led by oil

Tue Dec 16, 2008 10:14am EST
 
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*Market awaits Fed's rate decision

*Energy sector up 1.4 pct, oil rises above $46 a barrel

*BMO falls 8.3 pct on news it will issue equity (Adds quotes, details)

TORONTO, Dec 16 (Reuters) - Toronto's main stock index rose on Tuesday morning ahead of what the market expects will be an interest rate cut by the U.S. Federal Reserve later in the day.

Toronto's big energy sector rose 1.4 percent as oil climbed above $46 a barrel on expectations OPEC will week agree on its largest ever supply cut this week. [ID:nSP360674] EnCana Corp ECA.TO rose 1.5 percent to C$55.78.

The materials sector was up 1.7 percent with fertilizer company Potash Corp of Saskatchewan POT.TO, the top net gainer, up 6.3 percent at C$91.00.

Financials slipped 2.8 percent with Bank of Montreal BMO.TO, the most heavily traded stock, down 8.3 percent at C$29.88 after it said late on Monday it would raise up to C$1.1 billion by selling common shares, the latest Canadian bank to shore up its capital levels this way. [ID:nN15520396]

The Fed is expected to drop interest rates close to zero on Tuesday and the market is watching for other policy measures it may take to try to reverse the economic downturn.

"The dynamic is everybody is waiting for the Fed decision and what they're going to talk about in the future," said Sal Masionis, stockbroker at Brant Securities.   Continued...