CANADA STOCKS-TSX edges higher as commodities rally

Wed Oct 20, 2010 10:43am EDT
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* TSX up 14.03 points at 12,584.58

* Six of 10 main sectors stronger

* Potash, Encana drag (Adds details, commentary)

By Claire Sibonney

TORONTO, Oct 20 (Reuters) - Toronto's main stock index was little changed on Wednesday morning as commodities rebounded, but weaker Potash Corp POT.TO and Encana Corp ECA.TO shares undermined the move higher.

Gold and base metal prices both rallied as investors reassessed the initial reaction to the China's surprise interest rate hike on Tuesday as overblown, and the greenback weakened, boosting U.S. dollar-denominated commodities and sending the materials sector up 0.5 percent.

Barrick Gold Corp ABX.TO added 0.2 percent to C$47.01 and Teck Resources TCKb.TO gained 1.6 percent to C$44.61.

"Yesterday's moves were quite dramatic so a little bounce off the open is quite possible and that's exactly what we're seeing but we could have another leg down further on in the day," said Francis Campeau, a broker at MF Global Canada, in Montreal.

"To say that yesterday's move is completely forgotten, I doubt it ... China has been fueling all the growth and if they're putting on the brakes, it will show."   Continued...