Toronto stocks seen cautious ahead of Fed decision

Tue Apr 29, 2008 9:11am EDT
 
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TORONTO, April 29 (Reuters) - Toronto stocks were seen opening lower on Tuesday as weak commodity prices and bank issues weigh on the market, while investors wait for an anticipated Federal Reserve interest rate cut on Wednesday.

Investors are expected to remain cautious ahead of the Fed decision. Analysts expect it to cut interest rates by another 25 basis points.

"If the statement from the Fed indicates that they have finished cutting rates then that's probably not going to be regarded as great news by the financials," said Gavin Graham, chief investment officer, at Guardian Group of Funds.

"Until that is resolved they are going to remain a little flat or down."

Energy shares, which like the financial sector accounts for about 30 percent of the main Toronto index, were also expected to be under pressure as the price for U.S. crude slipped 1.6 percent to $116.83 a barrel on a firming U.S. dollar and the resolution of a strike at a British refinery.

Among key producers, Petro-Canada PCA.TO, the country's No. 4 oil producer and refiner, said first-quarter profit jumped 82 percent, helped by surging oil prices and the settlement of a derivative contract late last year.

Nexen Inc NXY.TO first-quarter profit jumped more than 400 percent on strong oil and gas production from its Buzzard field in the North Sea. The company, Canada's No. 4 independent oil explorer, doubled its quarterly dividend.

Among other companies reporting results were Rogers Communications (RCIb.TO: Quote), which said first-quarter profit more than doubled, thanks to growth in its wireless, Internet and digital cable subscriber base.

WestJet Airlines Ltd (WJA.TO: Quote) first-quarter profit rose 76 percent, helped by a strong domestic economy and international growth.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE begins the day at 14,085.85 after slipping about 18 points in the previous session. ($1=$1.01 Canadian) (Reporting by Scott Anderson; editing by Janet Guttsman)