CANADA STOCKS-TSX rises with oil price ahead of Fed move

Tue Dec 16, 2008 11:24am EST
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* Higher oil prices fuel TSX gain

* Drop in financial shares keep gain in check

* Investors hesitant ahead of Fed rate decision (Adds details)

TORONTO, Dec 16 (Reuters) - Toronto's key stock index was higher late on Tuesday morning as expectations that OPEC will agree this week on the biggest supply cut it has ever made gave a shot in the arm to weighty energy shares.

But the market was unable to build momentum as each rise in the index was followed with a wave of selling that left the index mostly straddling the break-even level.

The energy group led with a gain of 3 percent with oil prices above $46 a barrel as the Organization of the Petroleum Exporting Countries is expected to announce it will cut up to 2 million barrels a day of production when it meets on Wednesday.

Shares of EnCana Corp (ECA.TO: Quote) rose 2 percent to C$56.17, while Suncor Energy (SU.TO: Quote) rallied 3.6 percent to C$26.13.

The materials sector was up 1 percent with fertilizer company Potash Corp of Saskatchewan (POT.TO: Quote) the top net gainer, up 6.3 percent at C$91.00.

Many traders were avoiding huge commitments until learning of the Federal Reserve's interest rate decision and its thinking on policy at around 2:15 p.m. (1915 GMT) The Fed is expected to lower rates by at least half a percentage point to 0.5 percent.   Continued...