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TSX Ends Sharply Lower On Trade War, Growth Concerns

After opening with a big negative gap and falling deeper into the red subsequently, the Canadian stock market staged a mild recovery and regained some lost ground as the session progressed, but still ended with sharp losses on Thursday.

Concerns about escalation in U.S.-China trade tensions, global economic slowdown, a sell-off on Wall Street and falling crude oil prices sent stock prices tumbling on Bay Street.

The arrest of Huawei Technologies Co.'s CFO Meng Wanzhou in Canada on suspicion of violating U.S. trade sanctions against Iran and her possible extradition to the U.S., has raised fears that the U.S. and China may not reach an agreement on a long-term trade deal anytime soon.

The U.S. President Donald Trump and Chinese President Xi Jinping had negotiated a 90-day truce on their escalating trade war during the G20 summit in Argentina last weekend.

Crude oil prices tumbled after OPEC postponed a decision on quantum of production cuts to Friday.

Remarks from the Bank of Canada Governor Stephen Poloz that the Canadian economy was weaker than forecast and his views that low oil prices would cut growth, added to the woes.

The benchmark S&P/TSX Composite Index ended down 245.64 points, or 1.62%, at 14,937.00, after plunging more than 400 points to a low of 14,773.86 intraday.

Energy stocks were the worst hit in the sell-off. Consumer discretionary, financial and industrials stocks were the other prominent losers. Materials stocks too were mostly weak. Healthcare stocks moved higher, while consumer staples, information technology and telecommunications stocks ended mixed.

The Capped Energy Index shed 5.4%. Suncor Energy Inc. (SU.TO), Canadian Natural Resources (CNQ.TO), Encana Corporation (ECA.TO), Cenovus Energy Inc. (CVE.TO), Imperial Oil (IMO.TO), Husky Energy Inc. (HSE.TO), Tourmaline Oil Corp. (TOU.TO) and PrairieSky Royalty (PSK.TO) lost 4% - 8%.

ARC Resources (ARX.TO) and Vermilion Energy Inc. (VET.TO) also ended sharply lower.

The Capped Financial Index ended 1.7% down. Royal Bank of Canada (RY.TO) ended nearly 2% down, Canadian Imperial Bank of Commerce (CM.TO) declined by 1.55%, Toronto-Dominion Bank (TD.TO) weakened by 2.1%, Bank of Nova Scotia (BNS.TO) ended nearly 1% down and National Bank of Canada (NA.TO) ended 1.2% down.

Manulife Financialn Corporation (MFC.TO) and Sunlife Financial Inc. (SLF.TO) also declined sharply.

Consumer discretionary share Dollarama Inc. (DOL.TO) ended 11.8% down after it reported that its diluted net earnings per common share rose 7.9% to $0.41 in the third quarter of its current financial year, over the year-ago quarter.

The Stars Group Inc. (TSGI.TO) ended 5.3% down and Canada Goose Holdings Inc. (GOOS.TO) tanked 8.5%, while BRP Inc. (DOO.TO), Great Canadian Gaming Corporation (GC.TO), Gildan Activewear Inc. (GIL.TO) and Canadian Tire Corporation (CTC.A.TO) lost 1 to 3%.

In the industrials space, Canadian National Raiway Company (CNR.TO), SNC-Lavalin Group Inc. (SNC.TO), CAE Inc. (CAE.TO), Toromont Industries (TIH.TO) and Finning International Inc. (FTT.TO) ended lower by 2 to 6%.

The Capped Healthcare Index gained 6.6%. Aurora Cannabis Inc. (ACB.TO) soared 13.5% and Canopy Growth Corporation (WEED.TO) gained 7.6%.

Aphria Inc.(APHA.TO) ended with a hefty gain of over 50%. Aphria announced today that its Board of Directors has appointed a special committee of independent directors to review the Company's previously completed acquisition of LATAM Holdings Inc., which closed on September 27, 2018, and confirm the Company's belief that it conformed with all Company policies and generally accepted corporate governance practices.

The U.S. market rebounded after a sharp fall. The Dow, which lost over 800 points at one stage, recovered well and ended the session with just a modest loss of about 80 points. The S&P 500 edged down 4.11 points, while the Nasdaq rose 29.83 points.

Asian and European markets ended sharply lower on trade worries.

On the economic front, a report from Statistics Canada showed that the Canadian trade deficit widened to C$1.17 billion in October. Economists had expected a deficit of C$0.70 billion.

In U.S., Private sector employment increased by less than expected in the month of November, according to a report released by payroll processor ADP on Thursday. First-time claims for U.S. unemployment benefits edged down by less than expected in the week ended December 1st, the Labor Department revealed.

In commodities, crude oil futures for January ended down $1.40, or 2.7%, at $51.49 a barrel, after declining to a low of $50.11 a barrel.

Gold futures for February ended up $1.00, or less than 0.08%, at $1,243.60 an ounce, after rising to $1,249.90, the highest price since July 17.

Silver futures for March settled at $14.509 an ounce, while Copper futures for March ended at $2.743 per pound.

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