Toronto stocks seen mixed on banks, resources

Thu May 29, 2008 9:17am EDT
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*Banks stocks may rise after RBC results

*Resources may drag

TORONTO May 29 (Reuters) - The Toronto Stock Exchange's main index was set for a mixed start on Thursday after Royal Bank of Canada (RY.TO: Quote) and National Bank of Canada (NA.TO: Quote) reported profit drops, which were expected, and resources dragged.

Royal Bank, Canada's biggest bank, said its second quarter profit fell 27 percent as a result of writedowns that the market expected. Adjusted for the writedowns and some other items, the bank's earnings may have beat estimates, readying its stock for an early rise. See: [nN29370316]

National Bank, meanwhile, reported a 29-percent profit drop due to losses related to asset-backed commercial paper holdings. See: [nN29371856]

Also before the opening bell, Toronto-Dominion Bank (TD.TO: Quote) and Laurentian Bank of Canada (LB.TO: Quote) -- which reported quarterly results on Wednesday -- each received rating upgrades.

The news stream means attention will be on the TSX financial services sector, which accounts for about 28 percent of the overall Canadian index, and which is relatively flat so far in May.

"Canadian retail banking continues to measure 15 percent growth, and that's what you've seen from the other banks in general," said Gavin Graham, chief investment officer at Guardian Group of Funds, of the big banks' quarterly results.

"The banks have generally been in line with expectation, maybe a bit worse."   Continued...