CANADA STOCKS-Commodities, rate hopes spur early rise

Wed Oct 29, 2008 10:08am EDT
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*TSX extends gains, follows equity gains in Europe, Asia

*US Fed set to announce interest rate cut decision

*Nexen rallies after quarterly profit beats expectations

(Adds quote, details)

TORONTO, Oct 29 (Reuters) - The Toronto Stock Exchange's main index rallied on Wednesday morning as commodity stocks got a lift from underlying prices, and as hopes rose that the U.S. Federal Reserve and other central banks would cut interest rates further to try to revive global growth.

Heavily-weighted stocks that helped to push the market higher included EnCana Corp (ECA.TO: Quote), which rose 4.7 percent to C$58.07, and Manulife Financial (MFC.TO: Quote), which was up 6.7 percent to C$25.07.

The U.S. Federal Reserve is expected to chop its benchmark interest rate by at least 50 basis points, which would take the fed funds rate down to 1 percent.

"The U.S. Fed is going to announce an interest rate cut this afternoon," said Douglas Davis, president at Davis-Rea. "This is bad for the U.S. dollar and good for resource stocks."

At 9:50 a.m., the S&P/TSX composite index .GSPTSE was up 128.14 points, or 1.4 percent, at 9.279.72, with four of its 10 main groups higher.   Continued...