January 16, 2009 / 1:31 PM / in 9 years

CANADA STOCKS-TSX could ride bank shares to higher open

TORONTO, Jan 16 (Reuters) - Toronto’s main stock index may open higher on Friday with financial shares likely bolstered by the news overnight that Bank of America (BAC.N) received a bailout from the United States.

The news, which eclipsed signs of continuing fallout from the credit crisis for the financial sector, boosted U.S. stock futures, which bodes well for Toronto’s key index as it often takes its direction from its U.S. counterpart.

The Toronto index’s gains could be kept in check by the heavily weighted energy sector, which may slide at the start as oil prices fell further and were now more than $110 below a record peak set in July.

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed higher on Thursday after it reversed early losses, tracking a rebound in U.S. stocks on optimism about government stimulus.

Here is some of the news that may affect the market:

BANK OF AMERICA AID PACKAGE UNVEILED

Bank of America will receive another $20 billion in U.S. government cash and the U.S. Senate cleared the release of the remaining $350 billion of bailout funds amid new fears over credit losses at big banks. [ID:nSP387846]

OIL FALLS TOWARDS $35 AFTER IEA DEMAND REPORT

Oil fell to around $35 a barrel on Friday after the International Energy Agency cut sharply its forecast for world oil demand this year. [ID:nLG581112]

AGRIUM TAKES WRITE-DOWNS ON FALLING PRICES

Fertilizer producer Agrium Inc (AGU.TO) expects to record $117 million in write-downs in the fourth quarter because of falling prices, the company said on Thursday. [ID:nN15549657]

CANADIAN EXISTING HOME SALES FALL 17.1 PCT IN 2008

Existing home sales in Canada fell 17.1 percent in 2008, hit by a sharp drop in activity in the fourth quarter as the economy entered recession and consumer confidence slumped, a report said on Thursday. [ID:nN15539805]

RESEARCH ROUNDUP

Following is a summary of research on Canadian companies. For more, please see [RCH/CA]

* JP Morgan downgrades Agnico-Eagle Mines (AEM.TO) to “neutral” rating from “overweight”

* JP Morgan downgrades Kinross Gold Corp (K.TO) to “neutral” rating from “overweight”

* JP Morgan downgrades Pan American Silver PAA.TO to “underweight” rating from “neutral”

ECONOMIC DATA SLATE

There is no key domestic economic data due out ahead of the Bank of Canada’s interest rate announcement on Jan. 20. In a Reuters poll conducted on Thursday, 11 of 12 Canadian primary dealers said they expect a 50 basis point rate cut. One dealer expects a 75 basis point cut. [ID:nN15532724]

$1=$1.24 Canadian Reporting by Frank Pingue; Editing by Tom Hals

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