UPDATE 2-Toronto stock index bounces as financials gain

Wed Jun 25, 2008 3:36pm EDT
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(Updates to midafternoon)

* TSX gains in choppy session

* Energy shares continue to weigh

TORONTO, June 25 (Reuters) - The Toronto Stock Exchange's main index teetered around the break-even mark on Wednesday afternoon, as weak energy shares were offset by an upbeat reaction to the Federal Reserve's decision to hold U.S. interest rates steady, as expected.

After see-sawing to both the positive and negative in choppy trade, the benchmark pushed slightly higher, recovering from earlier losses as investors took heart from comments from the U.S. central bank.

On the downside, resource shares continued to weigh while commodity prices fell. Canadian Natural Resources (CNQ.TO: Quote) was down C$2.02, or 2 percent, at C$98.08, while Potash Corp of Saskatchewan (POT.TO: Quote) fell C$1.56, or 0.7 percent, to C$228.43.

The S&P/TSX composite index .GSPTSE was up 6.47 points, or 0.04 percent, at 14,416.07 with six of its 10 main sectors steady. In a volatile session, the index came back from its earlier low of 14,259.88.

In its keenly awaited statement, the Fed voiced greater concern about inflation, while it said the downside risks to growth look to have diminished somewhat.

"I think what (Fed Chairman Ben) Bernanke said was they were having hard time getting a handle on (inflation) and the other thing was that they did expect that it might moderate by the end of this year," said John Kinsey, portfolio manager at Caldwell Securities Ltd.   Continued...