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Canadian Shares Drifting Lower On Trade Worries

Amid renewed concerns about U.S.-China trade dispute, the Canadian stock market drifted lower Friday morning, led by losses in healthcare and consumer discretionary sections.

Disappointing Canadian employment data and weak housing starts and building permits reports too weighed on sentiment and pushed down stock prices.

Shares from the materials space were also exhibiting weakness, while industrial, financial, information technology and consumer sections were largely sluggish. Energy stocks were finding some support.

The benchmark S&P/TSX Composite Index was down 77.07 points, or 0.47%, at 16,327.46.

The Capped Healthcare Index shed more than 2%. CannTrust Holdings (TRST.TO) tumbled more than 6%. Aurora Cannabis (ACB.TO) and Aphria Inc. (APHA.TO) lost 3.5% and 4.2%, respectively.

Hexo Corp. (HEXO.TO) declined 3% and Canopy Growth Corporation (WEED.TO) shed 2.5%, while Bausch Health Companies (BHC.TO), Cronos Group Inc (CRON.TO) and Chartwell Retirement Residences (CSH.UN.TO) were down 1.3 to 2%.

The Capped Consumer Discretionary Index eased 1.2%. Linamar Corp. (LNR.TO) declined nearly 7%. The company reported net earnings of $150.2 million for the quarter ended June 2019, compared to $197.1 million in the year-ago quarter.

Restaurant Brands International (QSR.TO) shed 3.4% and Canada Goose Holdings (GOOS.TO) lost 2.3%. Hudsons Bay Company (HUD.TO), Great Canadian Gaming Corp. (GC.TO), Brp Inc. (DOO.TO), Gildan Activewear (GIL.TO) and Spin Master Corp. (TOY.TO) were down 1 to 2%.

Sleep Country Canada Holdings Inc. (ZZZ.TO) shares soared nearly 14% after the company reported a 27.3% surge in gross profit in the second quarter of this financial year, over the year-ago quarter.

Among miners, Ccl Industries (CCL.B.TO) plunged more than 9%. Ivanhoe Mines (IVN.TO), Hudbay Minerals (HBM.TO), Teck Resources (TECK.B.TO), First Quantum Minerals (FM.TO), Lundin Mining (LUN.TO), Semafo (SMF.TO), B2Gold Corp. (BTO.TO) and Methanex Corp. (MX.TO) lost 2 to 7%.

Cascades Inc. (CAS.TO) and Iamgold Corp. (IMG.TO) gained 4% and 3.2%, respectively. Osisko Gold Royalties (OR.TO) and Novagold (NG.TO) moved up 1.8% and 1.2%, respectively.

In the energy space, Shawcor (SCL.To) climbed up 8.5%, Enerplus Corp. (ERF.TO) surged up 6% and Seven Generations Company (VII.TO) advanced 3%.

Enerflex (EFX.TO) gained 2.7% after reporting second-quarter 2019 adjusted net income of $74.3 million ($0.32 per share) compared to $72.5 million ($0.30 per share) in the previous quarter. The company raised its average annual production and capital spending guidance for the full-year 2019.

Kelt Exploration (KELT.TO), Ensign Energy Services (ESI.TO) and Parex Resources (PXT.TO) also rose sharply.

Trade worries increased on reports that the Trump administration is holding off on decisions about allowing U.S. companies to resume business with Chinese tech giant Huawei.

On the economic front, the Canadian economy lost 24.2 thousand jobs in July 2019 after shedding 2.2 thousand in the previous month and compared with market expectations of a 12.5 thousand gain. Meanwhile, full-time employment in Canada decreased by 11.60 in July 2019.

The unemployment rate in Canada rose to 5.7% in July from 5.5% in the previous month and compared with market expectations of 5.5%.

Meanwhile, the seasonally adjusted annual rates of housing starts in Canada dropped 9.6% from a month earlier to 222,013 units in July 2019, beating market expectations of 203,500.

The value of building permits in Canada was down 3.7% from a year ago to C$ 8.0 billion in June 2019, following a downwardly revised 12.2% slump in the prior month and against market expectations of a 1.5% rise.

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