CANADA STOCKS-TSX flat as energy shares rise, financials decline

*

TSX flat

*

Declines in financials capped by energy sector gains

*

BMO reports lower Q1 adj. profit, shares fall

(Updated at 10:10 a.m. ET/ 1510 GMT)

By Purvi Agarwal

Feb 27 (Reuters) - Canada's main stock index was little changed on Tuesday as gains in energy stocks were offset by declines in the financial sector after Bank of Montreal reported a fall in its first-quarter adjusted profit.

At 10:10 a.m. ET (15:10 GMT), the Toronto Stock Exchange's S&P/TSX composite index was up 6.48 points, or 0.03%, at 21,330.79.

Heavy-weight financial stocks declined 0.4% on the index. Bank of Montreal lost 3.8% after it reported a fall in its first-quarter adjusted profit, as the bank set aside a large reserve against potential credit losses in a turbulent economy.

"BMO came in just below expectations. So that's going to be a little concern to the overall banking system. And the fear is whether some of the other banks that would report later in the week have got the same issue that the BMO has experienced", said Greg Taylor, chief investment officer at Purpose Investments.

Declines in the sector were limited by a 3.7% rise in the shares of Bank of Nova Scotia that reported a rise in first-quarter profit, as higher interest rates helped the lender earn more on loans.

Royal Bank of Canada, Toronto-Dominion Bank and National Bank of Canada, among others, are also set to report their quarterly results in the week.

Technology shares shed 0.3%.

Losses on the TSX were capped by energy shares, which rose 1.1% on steady oil prices as the market focused on uncertainty over a potential Gaza ceasefire, U.S. inflation data on Thursday and whether OPEC+ will extend voluntary supply cuts in March.

Investors awaited a key inflation report in the United States and Canada's gross domestic product (GDP) data, which are due on Thursday and could likely provide cues on the timing of potential interest rate cuts.

The Bank of Canada's next monetary policy decision is due on March 6. (Reporting by Purvi Agarwal in Bengaluru; Editing by Shweta Agarwal)