Toronto stocks rise on Fed rate cut speculation

Tue Jan 29, 2008 9:51am EST
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TORONTO Jan 29 (Reuters) - Toronto stocks firmed at the open on Tuesday, led by the country's top banks, as investors anticipated more interest rate cuts from the U.S. Federal Reserve.

Just after the open, the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was up 17.18 points at 13,004.08.

Seven of the TSX index's main groups rose, led by a 0.5 percent boost from the heavily weighted financial group and a 0.9 percent jump in the industrial group, helped by strong results from Canadian Pacific Railway CP.TO.

The Fed surprised investors last week with an emergency rate cut of 75 basis points and more rate cuts are expected this week, with wide debate over whether it will be 25 or 50 basis points.

Among the big banks, Royal Bank of Canada RY.TO added 23 Canadian cents to C$49.93 and Canadian Imperial Bank of Commerce CM.TO gained C$1.65 to C$69.78.

Railway shares led the industrial group higher after Canadian Pacific said on Tuesday lower future income tax rates helped double its fourth-quarter earnings.

CPR, the country's second-biggest railway, was up 85 Canadian cents at C$65.75, while rival company Canadian National Railway CNR.TO added 19 Canadian cents to C$49.37. ($1=$1.00 Canadian) (Reporting by Scott Anderson; Editing by Bernadette Baum)