Toronto stocks seen rising on earnings, Fed eyed
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: Quote)'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. Continued...