May 28, 2008 / 12:58 PM / 9 years ago

Toronto stocks to slip as commodities drop again

2 Min Read

*Weak commodities signal lower open for TSX

*More bank results on radar

*Sears Canada reports big rise in profit

TORONTO, May 28 (Reuters) - The Toronto Stock Exchange's main index was set to slide again on Wednesday, following the storyline from the previous session, as soft commodities signaled a weak start for energy and materials shares.

With Canadian banks churning out their quarterly results, reports expected from Toronto-Dominion Bank (TD.TO) and the smaller Laurentian Bank (LB.TO) could give the market direction later in the session.

On Tuesday, Bank of Montreal (BMO.TO) and Bank of Nova Scotia (BNS.TO) reported lower profits and higher provisions for credit losses. For details, see: [nN27379917]

The revelations knocked the bank stocks lower and helped to drain 1.6 percent from the overall TSX in the previous session, although falling commodity prices were responsible for the bulk of the damage.

Continuing that tumble on Wednesday were energy, base metals and precious metals.

Weakness in commodity markets usually leads to weakness in Canadian resource stocks.

However, Bruce Latimer, a trader at Dundee Securities, noted that the recent surge in oil has investors concerned over inflation, so crude's recent reversal may boost other segments of the market.

"With oil continuing to weaken, it could be better for the equity market in general," Latimer said.

Elsewhere, Sears Canada SCC.TO, the country's second-biggest department store chain, said first-quarter profit more than doubled on the back of a one-time gain from a property sale. For details, see: [nWNA2763]

The S&P/TSX composite index .GSPTSE starts the day at 14,522.13 after falling 236.44 points in the previous session. The index has fallen 3.5 percent in the last five trading days. ($1=$0.99 Canadian) (Reporting by Jonathan Spicer; Editing by Scott Anderson)

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