CANADA STOCKS-TSX seen opening higher, Fed awaited

Wed Jan 28, 2009 8:13am EST
 
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TORONTO Jan 28 (Reuters) - Toronto's main stock market could open higher on Wednesday, led by its heavily weighted financial group, as investors await the outcome of the U.S. Federal Reserve meeting.

Investors might also take time to mull Canada's latest budget after its Conservative government unveiled a two-year C$40 billion ($32 billion) stimulus package on Tuesday to help pull the economy out of recession. [nN27408307]

But weak gold and oil prices could weigh on the resource-heavy market.

Economists say the U.S. central bank will hold the target for official borrowing costs in a range of zero to 0.25 percent and repeat a commitment made last month to maintain "exceptionally low levels of the federal funds rate for some time."

With the Fed running out of room to cut interest rates, the U.S. central bank is expected to discuss unconventional measures to improve financial market operations, having already said it is weighing the benefits of major purchases or long-dated U.S. government securities.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE finished more than 1 percent higher on Tuesday as optimism ahead of Canada's budget boosted financial shares and overcame a drag from commodities groups.

Here is some of the news that may affect the index:

FED TO HOLD RATES NEAR ZERO, KICKSTART ECONOMY

The Federal Reserve will resume a key meeting on Wednesday to review options of how to restore U.S. growth, with its traditional interest rate policy tool already lowered almost to zero. [nN27471774]   Continued...