By John Tilak
TORONTO (Reuters) - Canada's main stock index retreated on Wednesday morning on market foreboding about what the U.S. Federal Reserve might say about its easy-money policy in a statement to be issued later in the day.
Financial shares dropped on the Fed-induced market anxiety, and smartphone maker BlackBerry fell 3.2 percent after a brokerage downgraded its U.S.-listed shares.
In recent weeks the market has been hit by speculation about whether the Fed will roll back its stimulus program, but expectations that the central bank will stick to the status quo gained momentum in the last few days, and Toronto stocks recorded gains on Monday and Tuesday.
"We are seeing a bit of a pause," said Julie Brough, vice president at Morgan Meighen & Associates. "There is (still) a little bit of optimism that the statement will give some consolation to investors that (the Fed pullback) is not going to be imminent and damaging when it does happen."
She said she expects that the Fed's retreat from stimulus will be a prolonged process. "The Fed has no desire to disrupt the economy or financial markets and create havoc."
The Toronto Stock Exchange's S&P/TSX composite index <.gsptse> was down 23.31 points, or 0.19 percent, at 12,344.12. It is in the red for the year.
To get the TSX to lift off, investors need to see a rebound in commodity prices, as well as increasing signs of growth in China and other parts of Asia, Brough said.
"That's what Toronto is waiting for," she said. "You need that extra bit of momentum to lift the resource stocks."
In a Reuters poll released this week, analysts forecast the resource-heavy Toronto stock index, which has struggled to gain traction in 2013, would kick into gear in the second half of the year as the global economy rebounds.
Five of the 10 main sectors on the index were in the red on Wednesday.
Financials, the index's most heavily weighted sector, gave back 0.2 percent. Royal Bank of Canada , the country's biggest lender, declined 0.4 percent to C$60.89 and had the most influential impact on the index.
BlackBerry's stumble, to C$14.64, caused the information technology sector to fall 0.8 percent.
Energy shares were up slightly with the price of oil. In the group, Encana Corp rose 1.7 percent to C$18.80.
Imperial Oil Ltd said that it was unable to find a buyer for its refinery in Dartmouth, Nova Scotia, and will instead convert the facility into a terminal operation. The stock was down 0.2 percent at C$40.44.
(Editing by Peter Galloway)
Source: http://news.yahoo.com/tsx-may-open-lower-fed-statement-focus-124102887.html
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