Rate cut, resources may boost Toronto stocks
TORONTO, April 22 (Reuters) - Toronto's main stock market index was set for a mixed open on Tuesday as disappointing corporate results from bellwethers like Canadian Pacific Railway Ltd (CP.TO) and EnCana Corp (ECA.TO) offset buoyant commodity prices, and investors digest the latest interest rate cut.
The Bank of Canada cut interest rates by 50 basis points, as expected, reducing the key rate to 3 percent. It signaled that further easing was required but that it might pause before cutting rates again.
The rate cut could inject more life into the heavily weighted financial issues.
"The market will likely open higher as the financials benefit from the interest rate cut news, while materials and oils strengthen on the rising commodity prices," said Steve Ibel, an institutional equities trader at Beacon Securities, in Halifax Nova Scotia.
And record oil prices above $118 a barrel could push the resource-heavy market even higher.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE closed up 84 points on Monday at 14,321.16.
But a string of disappointing results from some of the country's blue chip companies could temper the gains of the financials and resources.
Canadian Pacific reported a 29-percent drop in its first quarter profit on Tuesday and reduced its earnings guidance for this year, citing rising fuel costs and a stronger Canadian dollar.
One day earlier, rival Canadian National Railway (CNR.TO) posted a 4 percent drop in first-quarter net profit, citing tough winter weather that slowed train operations.
EnCana Corp, Canada's biggest oil and gas company, said on Tuesday first-quarter net profit fell 81 percent, as it suffered a $737 million loss on risk management activities.
Fording Canadian Coal Trust FDG_u.TO posted a drop of nearly 45 percent in its first quarter profit from continuing operations on Tuesday.
Teck Cominco Ltd's (TCKb.TO) first-quarter profit dipped 4 percent on weaker results from zinc operations and lower coal prices, the diversified Canadian miner said on Monday. ($1=$1.01 Canadian) (Reporting by Scott Anderson; Editing by Bernadette Baum)
