June 25, 2008 / 3:26 PM / 11 years ago

UPDATE 1-Toronto stocks sag as resources weigh

(Updates to midmorning)

* TSX tumbles 100 points as resources drag

* Investors wait for U.S. interest rate decision

TORONTO, June 25 (Reuters) - The Toronto Stock Exchange’s main index retreated on Wednesday morning as resource issues tumbled along with oil prices and investors awaited an interest rate decision from the U.S. Federal Reserve.

The energy and materials sectors were down 2.5 percent and 2.3 percent respectively as the price of oil slid $4 after data showed crude supplies rose unexpectedly last week.

Among oil producers, Suncor Energy (SU.TO) was down C$2.29, or 2.7 percent, at C$59.02, while in the materials sector, Potash Corp of Saskatchewan POT.TO fell C$6.47, or 2.8 percent, to C$223.52.

Market-watchers were also keeping watch on the U.S. central bank’s rate decision and statement due later in the day, though it is widely expected to stand pat on interest rates.

Gavin Graham, chief investment officer at Guardian Group of Funds, said investors were keen to hear what the bank had to say, “if only because the language they use to describe what their outlook is for inflation is going to be a fairly major part of people’s enthusiasm, or lack thereof, going forward.”

The S&P/TSX composite index .GSPTSE was down 102.24 points, or 0.71 percent, at 14,307.36 after rising as high as 14,490.16 shortly after the opening bell. The energy and materials sectors were the only groups on the downside.

The large financial group pushed up 1.4 percent, with Toronto-Dominion Bank (TD.TO) gaining C$1.29, or 2 percent, to C$65.25, and Bank of Montreal (BMO.TO) adding C$1.24, or 2.9 percent, to C$43.55.

Graham noted that the expectation that the Fed won’t raise rates was helping lift financial shares.

“If (the Fed doesn’t) sound too aggressive on the comments about the likelihood of raising rates, then probably people will think that it’s going to be flat for the rest of the year, which is good news for financials,” said Graham.

Shares of BlackBerry maker Research In Motion RIM.TO slipped C$1.22, or 0.9 percent, to C$140.56 ahead of the company’s first-quarter results expected after the bell. Analysts expect RIM to release earnings and revenue figures at the high end of its forecasts. ($1=$1.01 Canadian) (Reporting by Leah Schnurr; editing by Rob Wilson)

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