UPDATE 1-Toronto stocks rise, but off session high

Tue Mar 18, 2008 10:30am EDT
 
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TORONTO, March 18 (Reuters) - Toronto's main stock market index jumped more than 1 percent at the open on Tuesday before scaling back, as investors picked up shares offering value after steep losses in the previous session.

Investors were also in a buying mood ahead of the U.S. Federal Reserve's interest rate announcement later in the day.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was up 57.90 points, or 0.5 percent, at 13,010.05 in morning trading, after earlier climbing to 13,129.82. This follows a drop of 300 points on Monday.

Seven of the TSX index's 10 main groups rose, with the influential energy group up 0.9 percent and the heavily weighted financial group gaining 0.6 percent.

Analysts and economists widely expect the Fed to cut U.S. short-term interest rates by one percentage point, taking the benchmark fed funds target rate down to 2 percent.

Over the weekend, the Fed made an emergency quarter-point cut to its discount rate to 3.25 percent and expanded lending to a wider range of big financial firms.

Meanwhile, Canada's annual inflation rate eased in February, leaving the Bank of Canada in a comfortable spot if it wants to follow the Fed and slash interest rates aggressively amid growing market turmoil.

"We're following through on the overnight rebound and waiting on the Fed and we'll see where we go from there," said Paul Hand, managing director at RBC Capital Markets.   Continued...