August 12, 2008 / 12:51 PM / 11 years ago

Toronto stock index set to open lower on resources

*TSX set to open lower on weak commodities

*Oil and gold prices retreat

*Rothmans, Rona results could be in spotlight

TORONTO, Aug 12 (Reuters) - Toronto Stock Exchange’s main index was set to open lower on Tuesday, as stumbling commodity prices will likely hurt energy and materials stocks.

Worries over slumping demand for commodities have dogged the benchmark index in recent weeks.

U.S. light crude oil futures dropped 0.7 percent to $113.70 a barrel, after earlier falling to a three-month low of $112.48, as Russia called a halt to the conflict in Georgia. Spot gold prices earlier plummeted to 8-month lows as a rally in the U.S. dollar triggered a massive selloff.

News out of the United States on Tuesday isn’t likely to help the market either, said Steve Ibel, institutional equities trader at Beacon Securities, in Halifax, Nova Scotia.

“We are seeing further weakness in commodities,” said Ibel. “The financials might get hit as well due to the problems south of the border.”

No. 3 U.S. bank JPMorgan Chase (JPM.N) said it had taken another $1.5 billion of writedowns since July, while Swiss bank UBS AG UBSN.VX posted a worse-than-foreseen quarterly loss.

Concerns about the health of the global economy will likely keep the benchmark index volatile in the short term, said Ibel.

“Right now people are almost terrified to step into this market,” he said.

In company news, Rothmans Inc ROC.TO could be in focus after Canada’s No. 2 cigarette maker, which is being bought by Philip Morris International Inc (PM.N), reported a first-quarter loss, hurt by expenses relating to a police investigation into tobacco smuggling.

Canadian home improvement retailer Rona Inc RON.TO, which reported that same-store sales fell 4.4 percent in the second quarter, could also be in the spotlight in the wake of data showing the Canadian housing market cooled further in the summer.

Other quarterly results that could be in focus include those by First Quantum (FM.TO) and Kinross (K.TO).

The S&P/TSX composite index .GSPTSE begins the day at 13,203.19, after losing 1.04 percent on Monday.

In New York, stock futures pointed to a flat open as credit worries weighed. ($1=$1.07 Canadian) (Reporting by Jennifer Kwan; Editing by Bernadette Baum)

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