Toronto stocks set to ease amid bearish sentiment

Wed Dec 19, 2007 9:17am EST
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TORONTO Dec 19 (Reuters) - The Toronto Stock Exchange's main index was seen easing at the open on Wednesday, adding to four straight days of losses, as flat commodity prices and bearish prospects for equity markets next year hold sway.

Oil and gas stocks could attract attention after the Alberta provincial government said late on Tuesday it had ordered Suncor Energy SU.TO to cut emissions of deadly hydrogen sulfide at its oil sands operations. For details, see: [nN18536636]

Elsewhere in the sector, Precision Drilling Trust PD_u.TO said on Wednesday it aimed to quicken its pace of growth next year by focusing capex investment on the construction of "super" series land drilling rigs. For details, see: [nN19574121]

"It's been a tough market on the resource side -- while oil prices are high, gas prices are low, and costs have gone up very dramatically," said Glenn MacNeill, vice-president of investments at Sentry Select Capital Corp.

"There's just a negative sentiment to the market that's hard to overcome given the outlook."

The futures prices of natural gas and most base metals were flat, while the price of spot gold eased, which could hit TSX materials stocks.

After dropping 6.4 percent in November, the TSX inched higher earlier in December until the U.S. Federal Reserve cut interest rates by a modest 25 basis points. That disappointed investors hoping for a deeper cut and sent the Canadian index down in five of the last six sessions.

On Tuesday, the Bank of Canada and other central banks made cash injections in an effort to grease the wheels of global credit markets and stave off a possible recession, particularly in the United States.

"That was a huge number they provided in liquidity -- half a trillion dollars -- so that will be part and parcel" of the TSX's performance on Wednesday, MacNeill added.   Continued...