Materials weigh on Toronto stocks ahead of Fed

Wed Jan 30, 2008 10:01am EST
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TORONTO Jan 30 (Reuters) - The Toronto Stock Exchange's main index retreated on Wednesday, with materials shares leading the fall, as investors girded for the U.S. Federal Reserve's decision on interest rates.

The S&P/TSX composite index .GSPTSE was down 68.72 points, or 0.5 percent, at 12,977.71. Materials stocks, down 1.3 percent, led the fall with Potash Corp of Saskatchewan POT.TO off C$2.76 at C$138.00.

The financial sector dipped 0.4 percent while industrials slipped 0.6 percent. The base metals and mining subsector was off 0.7 percent.

The TSX and other stock markets are expecting the Fed to cut its key U.S. rate by 50 basis points, although some observers are expecting a milder 25-point cut.

The Fed decision, expected at 2:15 p.m. (1915 GMT), comes on the heels of last week's surprise 75-point cut, which helped to cushion a free fall in stock markets rattled by the prospect of a slowing global economy.

Suncor Energy SU.TO was the biggest weighted gainer on Wednesday, up 21 Canadian cents at C$91.31 after its board approved a C$20.6-billion investment to ramp up crude oil production.

The operator of Canada's second-largest oil sands project also struck a deal with the Alberta government on royalties.

($1=$1.00 Canadian) (Reporting by Jonathan Spicer; Editing by Scott Anderson)