June 11, 2008 / 1:14 PM / 11 years ago

Toronto stocks to bounce back from steep drop

*Firm commodities to provide lift

*Agrium boosts profit outlook

*Forzani swings to loss

TORONTO, June 11 (Reuters) - The Toronto Stock Exchange’s main index was seen bouncing back on Wednesday from a thumping in the previous session, with the help of rising commodities and a higher profit outlook from heavyweight listing Agrium Inc AGU.TO.

After plunging more than 220 points, the Canadian benchmark was set to get a lift from its resource sectors as key commodities oil, gas, gold and most base metals advanced.

In the materials sector, investors will weigh news that Agrium, the world’s No. 3 nitrogen producer, expects to earn more than previously expected in the second quarter — but also that it faces delays and a potential credit default at a project in Egypt. For details, see: [nN11422971]

The fertilizer-agriculture sector “has been one of the best-performing sectors of both the Canadian and the U.S. market ... with even the mid-tier stocks getting dragged along to the upside,” said Bruce Latimer, trader at Dundee Securities, who noted Agrium shares were trading higher in pre-market action.

U.S. crude oil futures were up about 2 percent at $133.92 a barrel ahead of weekly data on U.S. energy inventories, which usually affects TSX energy stocks.

Spot gold was up about $8 an ounce, following the lead of oil.

Forzani Group FGL.TO may attract attention after the sporting goods retailer swung to a loss in the first quarter. For details, see: [nN11433577]

Elsewhere, Nortel Networks NT.TO reconfirmed its 2008 outlook and said it signed a WiMax agreement with an Israeli firm. See: [nN11439586]

Global stocks climbed in early action and U.S. stocks pointed higher as markets recovered from inflation worries that weighed over the last couple of days.

The S&P/TSX composite index .GSPTSE starts the day at 14,736.20 after tumbling 224.56 points, or 1.5 percent, in the previous session, when the Bank of Canada unexpectedly left interest rates steady. ($1=$1.02 Canadian; Editing by Scott Anderson) (Reporting by Jonathan Spicer)

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