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TORONTO, Jan 28 (Reuters) - The Toronto Stock Exchange’s main index recovered earlier losses and nudged into positive territory late on Monday morning, propped up by strengthening resource shares.
After falling more than 100 points shortly after the open, the S&P/TSX composite index .GSPTSE was up 21.20 points, or 0.16 percent, at 12,916.03. But eight of the TSX’s 10 main sectors were stuck in negative territory.
Strength in the materials sector, home to resource shares, supported the index as the group climbed 1.3 percent. The gold producers subsector was up 1.1 percent as spot gold reached a record high above $924 an ounce.
The price of bullion was boosted by a power crisis in South Africa, a major gold producer, that has cut output and raised concerns over supply.
Also in the materials sector, Potash Corp of Saskatchewan (POT.TO) gained C$4.02, or 3 percent, to C$138.00.
But investors were cautious after last week’s turbulence, which saw the index swing wildly up and down as fears continued to swirl around the possibility of a U.S. recession.
“I think people are really digesting here what’s happened the last week, and seeing a few buying opportunities,” said Brian Pow, vice president, research and equity analyst at Acumen Capital Partners, in Calgary, Alberta.
Investors were also awaiting the U.S. Federal Reserve’s decision on interest rates later in the week. The Fed opted for an emergency 75 basis-point rate cut last week, while the Bank of Canada cut rates by 25 basis points.
“The commentary through the week was that the Fed’s reaction may have been a little bit of a knee-jerk last week, and so I think (investors) want to get a better picture of what they’re trying to push forward,” Pow said.
Also on the upside on Monday, the heavyweight financial sector edged up 0.4 percent, with Fairfax Financial Holdings Ltd (FFH.TO) adding C$2.66, or 0.9 percent, to C$299.06, and Bank of Montreal (BMO.TO) gaining 47 Canadian cents, or 0.9 percent, to C$55.87.
On the downside, the energy group was off 0.3 percent while the price of oil was hurt by profit-taking amid concerns over the state of the global economy.
The small telecoms sector was down 1.1 percent, while BCE Inc (BCE.TO) shed C$1.39, or 3.8 percent, to C$34.90 amid worries that the buyout of BCE could be delayed or fall apart.
$1=$1.00 Canadian Reporting by Leah Schnurr; Editing by Peter Galloway