UPDATE 1-BMO Capital lowers 12-month target for S&P/TSX

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Sept 12 (Reuters) - BMO Capital Markets lowered its 12-month target price for the S&P/TSX composite index .GSPTSE to 15,000, as it cut its earnings view for the Toronto Stock Exchange's main index on declining commodity prices.

"Worries over a financial crisis have fanned fears of global recession, enabling the global bear market to overtake the S&P/TSX. The latter has tumbled 16 percent from its June peak," analyst Ben Joyce said in a note on Canadian Portfolio Strategy.

Joyce lowered his operating earnings forecast for S&P/TSX by $45 to $890 for 2008 and by $55 to $945 for 2009.

Joyce added that the earnings impact from the decline in energy and commodity prices is cushioned by the weakness in loonie, as the Canadian dollar is known because of the image of the bird on the one-dollar coin.

The analyst lowered his Canadian dollar exchange rate assumption, underlying his earnings forecast, to 95 cents from $1.00.

"While the downdraft in commodity prices has lowered our earnings forecast and price target, we believe the weakness in the S&P/TSX is overdone," Joyce said.

"Leading economic indicators continue to signal a pronounced global slowdown, but not a recession."

BMO kept its target for the Standard & Poor's 500 Index .SPX unchanged at 1,425. Operating earnings forecast for the index was also unchanged at $82.50 for 2008 and $88.00 for 2009. (Reporting by Ratul Ray Chaudhuri in Bangalore; Editing by Himani Sarkar)