GSPTSE fell 35 percent in 2008 with theenergy

(Repeats Friday's column) Stocks Currencies By Jennifer Kwan TORONTO, Jan 18 (Reuters) - Investors are counting on theBank of Canada to deliver a hefty 50 basis point interest ratecut on Tuesday, with anything less likely to knock thecountry's already fragile stock market lower, analysts say. A minority of market players are holding out hope thecentral bank will cut rates even further, a move that wouldlikely spur gains in cyclical energy, materials and consumerstocks, said Paul Taylor, chief investment officer at BMOHarris Investment Management Inc. "Everyone expects the Bank of Canada to throw bones at themarket," Taylor said. In December, theFederal Reserve lowered its benchmark rate to a range of zeroto 0.25 percent. Since December 2007, the Bank of Canada has already cut itskey overnight rate by three full percentage points.

A Reuters poll of primary dealers released on Thursdaysuggested the Bank of Canada will cut its key overnight rate byat least 50 basis points on Tuesday to a fresh 50-year low of1.00 percent to combat a global slowdown the central bank saidhas pushed the country into recession. Just one dealer, Desjardins Securities, expects a 75 basispoint cut to 0.75 percent. Given the widespread expectation that rates will fall byhalf a percentage point, market watchers said the focus will beon the central bank's accompanying statement and possible clueson future action. "If the Bank of Canada clearly takes out any of the forwardeases by either not cutting this month or clearly saying theyare not going to ease going forward, that could be seen as anegative," said Francis Campeau, broker at MF Global Canada, inMontreal. LOOKING BEYOND THE BANK The Toronto Stock Exchange's resource-laden S&P/TSXcomposite index .GSPTSE fell 35 percent in 2008 with theenergy .SPTTEN and materials .GSPTTMT groups hit hard byfalling demand as the global economic downturn gainedmomentum.

That trend has continued into 2009 as a string of economicdata and reports on both sides of the border affirm a gloomyeconomic outlook. The S&P/TSX compositeclosed up 40.79points, or 0.46 percent, at 8,920.40 on Friday, ascommodity-related stocks overcame weakness in financials The index finished down 1.8 percent for the week. Given the global scale of the crisis, market strategistssaid investors are paying greater attention to events unfoldingoutside of Canada, especially commodity price movements. Mostnotable has been the descent in the price of oil CLc1, whichhas crumbled $100 from its peak above $147 in July. Many investors are also looking past the upcoming ratedecision to the Canadian budget due on Jan.

27, which is likelyto include a stimulus package that could affect markets, saidGeorge Vasic, equity strategist at UBS Securities Canada. "There's no risk that there won't be stimulus so now thequestion is how much" he said. (Editing by Jeffrey Hodgson and Peter Galloway) Stocks Currencies. LONDON (Reuters) - World equities are still well above the rock bottom levels they hit at the end of last year, but half way through January the bounce has lost its spring. Hot Stocks ChinaThe question for investors now is whether recent weakness on stock markets the MSCI all-country index fell for seven sessions in a row before rising on Friday reflects a return to last year's misery or is just a pause.Adding to investor uncertainty, the troubles of the world banking system have risen to the fore again as the fourth-quarter earnings season gets underway.U.S.