January 29, 2008 / 9:48 PM / 11 years ago

UPDATE 2-Toronto stocks lifted by CP Rail as rate cut eyed

(Updates official closing numbers, adds details, quotes)

TORONTO, Jan 29 (Reuters) - The Toronto Stock Exchange’s main index climbed on Tuesday as energy issues strengthened and Canadian Pacific Railway (CP.TO) reported it more than doubled its fourth-quarter profit.

CP Rail, Canada’s No. 2 railway, ended up C$2.36, or 3.6 percent, at C$67.26 after it posted an increase in profit, helped by lower income tax rates. CP Rail helped lift the industrials sector 2.2 percent.

The heavyweight energy sector gained 0.7 percent as crude prices rose on expectations that OPEC would maintain output levels and hopes of a U.S. interest rate cut.

Suncor Energy (SU.TO) rose 63 Canadian cents, or 0.7 percent, to C$91.10, and Husky Energy (HSE.TO) moved up C$1.10, or 2.8 percent, to C$40.85.

Investors were awaiting the U.S. Federal Reserve’s next decision on interest rates, due on Wednesday, and optimism over another rate cut also helped lift the index.

“The trend is I think we’re on tenterhooks - tomorrow is the showtime,” said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.

“I can’t say there’s any direction at this point in time, there’s so much focus on what’s going to be said (by the Fed tomorrow).”

The S&P/TSX composite index .GSPTSE closed up 59.53 points, or 0.46 percent, at 13,046.43 with six of its 10 main groups higher and one flat. It was the second day in a row the index finished on the upside.

Financial issues were up 0.9 percent. Canadian Imperial Bank of Commerce (CM.TO) added C$2.42, or 3.6 percent, to C$70.55, and Toronto-Dominion Bank (TD.TO) rose C$1.14, or 1.7 percent, to C$68.12.

Royal Bank of Canada (RY.TO) finished up despite saying it will write off exposure to a bond insurer in its first-quarter results. Royal, Canada’s biggest bank, edged up 28 Canadian cents, or 0.6 percent, at C$49.98.

Elsewhere on the earnings front, TransCanada Corp (TRP.TO) reported its fourth-quarter profit soared 40 percent, boosted by recent pipeline acquisitions. The company also upped its quarterly dividend by 6 percent. Shares of TransCanada rose 88 Canadian cents, or 2.3 percent, to C$38.88.

$1=$1.00 Canadian Reporting by Leah Schnurr; Editing by Peter Galloway

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