TORONTO, Dec 10 (Reuters) - Toronto’s main stock market index was up more than 100 points at midmorning on Monday as the market bet the U.S. Federal Reserve would cut interest rates on Tuesday and as higher gold prices boosted gold-mining shares.
The Fed is expected to cut its key lending rate by at least 25 basis points from 4.5 percent.
“Everybody has a rate cut built into their dreams and they are probably going to get it,” said Michael Sprung, president at Sprung and Co Investment Counsel. “I would hate to see the sell off it they don’t get it.”
Last week, the Bank of Canada cut its key lending rate by 25 basis points to 4.25 percent.
Rate cuts usually spur on equity markets as they signify lower borrowing costs for investors and companies.
The Toronto Stock Exchange’s key S&P/TSX composite index .GSPTSE was up 121.53 points, or 0.9 percent, at 13,984.50
Seven of the TSX index’s main groups were higher, led by a 1.5 percent boost in the resource-heavy materials group and a 0.9 percent rise in energy shares. Financial shares gained 0.6 percent.
Gold-mining shares led the way in the materials group on the back of a 2 percent jump in the bullion price to above $815 an ounce in New York.
Barrick Gold (ABX.TO), the biggest gold producer in the world, was up C$1.12 at C$41.03, and Goldcorp G.TO added 80 Canadian cents to C$34.50.
Other materials shares rising were Potash Corp (POT.TO), which added C$1.77 to C$131.95, and Teck Cominco TCKb.TO, which rose 63 Canadian cents C$39.68.
Energy shares also rose on the back of a rising U.S. crude oil price, which was up 1.5 percent a barrel at $89.58.
Financial shares, which account for 30 percent of the overall index, climbed ahead of the anticipated U.S. rate cut.
The TSX Group (X.TO), which runs the Toronto Stock Exchange, dropped C$2.19 to C$55.03 after it said it would pay C$1.3 billion for the Montreal Exchange MXX.TO. The Montreal bourse was up C$3.55 at C$40.75. ($1=$1.01 Canadian) (Reporting by Scott Anderson; Editing by Peter Galloway)