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TORONTO, Jan 29 (Reuters) - Toronto's main stock market index was expected to open higher on Tuesday as precious metals prices rocketed to record levels and ahead of another interest rate cut by the U.S. Federal Reserve.
Canadian Pacific Railway (CP.TO)'s news early on Tuesday that its profit more than doubled will likely boost sentiment.
"We should open modestly highly, but this is based on the expectation of further rate cuts," said Fred Ketchen, director of equity trading at ScotiaMcLeod.
The Fed surprised investors last week with an emergency rate cut of 75 basis points, shortly before the Bank of Canada cut its key lending rate by 25 basis points.
More rate cuts are expected this week, with wide debate over whether it will be 25 or 50 basis points.
Ketchen said the sentiment is for more rate cuts, but the mood could shift if investors are disappointed by the Fed's decision.
"If they don't cut rates, I would think we will probably be in the glue. But that will have to wait until tomorrow (Wednesday) afternoon," he said.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE climbed 92 points to 12,986.91 on Monday on the rate hike expectations and strong resource prices.
The resource rally is expected to continue on Tuesday as prices of key commodities climbed. Gold was firm at $923 an ounce after touching a high of $933.10 earlier in the session on rate cut expectations.
Among base metals, copper and aluminum rose on hopes that rate cuts would ward off a recession and boost demand.
Meanwhile, U.S. crude oil rose 0.5 percent to $91.40 a barrel.
In individual company news, TransCanada Corp (TRP.TO) said on Tuesday that its fourth-quarter profit climbed 40 percent and it boosted its quarterly dividend by six percent.
FirstService Corp (FSV.TO) reported a 30-percent drop in third-quarter profit on Tuesday and lowered its adjusted earnings per share outlook for the year ending March 31.
Cameco Corp (CCO.TO) said on Monday it could cost up to C$20 million to clean up contaminated soil at its uranium conversion plant in Port Hope, Ontario, up from an initial estimate of C$3 million.
Theratechnologies Inc TH.TO said on Tuesday it is considering strategic options, including a sale or merger of the company, as well as the licensing of its lead compound tesamorelin. ($1=$1.00 Canadian) (Reporting by Scott Anderson; Editing by Bernadette Baum)