Toronto-Dominion, Sun Life, EnCana May Fall on Rate Cut, Oil

By John Kipphoff

Oct. 21 (Bloomberg) -- Toronto-Dominion Bank may fall, bids on the Toronto Stock Exchange indicated, after the central bank cut borrowing costs less than expected, saying it will probably have to act again to fight a credit crisis and recession.

The Bank of Canada lowered its interest rate for overnight loans between commercial banks by a quarter of a point to 2.25 percent, the lowest since October 2004. Thirteen out of 24 economists surveyed by Bloomberg predicted a cut twice as deep.

EnCana Corp. may decline, bids showed, as crude oil-prices retreated for the first time in three days after the U.S. dollar rose against the euro and the Canadian currency, dimming the appeal of commodities.

The Standard & Poor's/TSX Composite Index rose 7.2 percent to 10,251.40 yesterday in Toronto as higher oil prices and lower borrowing costs lifted energy producers and financial companies, which account for more than half the benchmark's value.

Toronto-Dominion, Canada's second-biggest lender by assets, may drop 68 cents to C$57.80, bids already submitted in Toronto showed. Royal Bank of Canada, the largest, may fall C$1.33 to C$48.50, bids indicated.

Sun Life Financial Inc. may retreat C$1.95 to C$31.77. Canada's third-largest insurer posted its first loss since going public eight years ago on writedowns tied to failed U.S. banks including Lehman Brothers Holdings Inc. and Washington Mutual Inc.

Crude oil fell as much as $2.08, or 2.8 percent, to $72.17 a barrel in electronic trading in New York.

EnCana, the nation's biggest energy company by market value, may decline C$2.06 to C$55.01, based on bids.

U.S. stock futures slid, pointing to the market's biggest drop in four days, as technology companies and regional banks reported earnings that missed estimates and predicted the slowing economy will keep damping profits.

To contact the reporter on this story: John Kipphoff in Montreal at jkipphoff@bloomberg.net.