*Bank of Montreal quarterly profit sags
*Oil and gold slump on firmer U.S. dollar
*Maple Leaf Foods under spotlight on meat recall
TORONTO, Aug 26 (Reuters) - The Toronto Stock Exchange’s main index was set for a softer open on Tuesday as weakness in commodities weigh on the resource-heavy market and as investors study quarterly results from the country’s biggest banks including Bank of Montreal (BMO.TO).
Bank of Montreal, Canada’s fourth largest bank, said net quarterly profit slipped 21 percent, as provisions for credit losses surged and it took charges for the declining value of certain credit-related securities.
All eyes will be on the financial sector as investors seek clues on whether Canadian banks have been severely affected by the slump in the U.S. financial sector, said Joe Ismail, a technical analyst at Maison Placements Canada.
“There is going to be a lot of debate about the earnings numbers that are coming out of the banks,” said Ismail.
Results from Bank of Nova Scotia (BNS.TO) are also expected on Tuesday.
The S&P/TSX composite index .GSPTSE begins the day at 13,288.96, down 158.33 points, or 1.2 percent, in a broad fall prompted by financial services stocks.
Analysts had earlier predicted that financials could see choppy activity ahead of quarterly results this week as Canada’s big six banks are expected to report lower quarterly earnings, largely on weak capital markets activity, higher loan loss provisions and more write-downs.
As well, the heavyweight sector has been tangled in the downward momentum of U.S. banks.
Extending Monday’s losses, the heavyweight energy sector could be dragged down by oil, which slipped to around $114 a barrel on a firmer U.S. dollar.
Materials may slip along with gold, which also dipped on a firmer U.S. dollar, while some base metals also sagged.
“This week is very crucial,” said Ismail, noting commodities are trying to find a floor. “The market is trying to identify which direction to proceed during the next two months.”
Investors may also look to U.S. consumer confidence data and new home sales data for market direction.
In company news, Maple Leaf Foods (MFI.TO) remains in focus after health officials said on Monday the number of deaths rose to 12 out of 26 confirmed cases of food poisoning outbreak linked to deli meats produced at a plant owned by Maple Leaf. There are another 29 suspected cases of listeriosis.
Elsewhere, Transcontinental Inc (TCLa.TO) said it won a C$1.7 billion contract from the Globe and Mail newspaper that provides for the Montreal-based company to print the national newspaper for 20 years.
In New York, futures pointed lower ahead of the economic data. ($1=$1.05 Canadian) (Reporting by Jennifer Kwan; Editing by Scott Anderson)