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TSX Ends Higher Again On Trade Talks Optimism

The Canadian stock market ended higher on Thursday as optimism about U.S.-China trade talks helped keep investor sentiment positive. Gains in energy, information technology and industrial sections contributed to market's uptick.

A few stocks from financial and materials sectors too edged higher. Cannabis stocks tumbled after Hexo issued a profit warning. Consumer staples were the other notable losers.

The benchmark S&P/TSX Composite Index ended up 42.81 points, or 0.26%, at 16,422.68, after scaling a low of 16,358.10 and a high of 16,444.35 in the session.

Shares of Hexo Corp plunged 23% after the company warned of a revenue shortfall for the fourth quarter, citing "lower than expected product sell through." The company said it was also withdrawing its fiscal 2020 financial outlook due to "increased level of unpredictability."

The company expects revenue for the quarter to July 31 of C$14.5 million to C$16.5 million ($10.9 million to $12.4 million), well below the FactSet consensus of C$24.8 million.

Green Organic Dutchman Holdings (TGOD.TO) ended 22.4% down. CannTrust Holdings (TRST.TO) and Aphria Inc. (APHA.TO) declined more than 13%, and Canopy Growth Corp (WEED.TO) ended nearly 11% down. Aurora Cannabis (ACB.TO) and Cronos Group (CRON.TO) lost more than 9% and 7%, respectively.

Encana Corp (ECA.TO), Baytex Energy (BTE.TO), Canadian Natural Resources (CNQ.TO) and Enbridge Inc. (ENB.TO) were among the prominent gainers in the energy space.

In the information technology space, Shopify Inc. (SHOP.TO) gained more than 3%. BlackBerry (BB.TO), Exfo Inc. (EXF.TO) and Kinaxis Inc. (KXS.TO) ended higher by 1.4 to 1.7%.

Among the stocks in the industrials index, Tfi International (TFII.TO) gained 3.6%, Air Canada (AC.TO) gained 2.7% and Bombardier Inc. (BBD.B.TO) advanced 2.5%. Cargojet (CJT.TO) ended nearly 2% up, while Transcontinental Inc. (TCL.A.TO), Ballard Power Systems (BLDP.TO), Finning International (FTT.TO) and Canadian Pacific Railway (CP.TO) gained 1 to 1.7%.

Among financials, CDN Western Bank (CWB.TO), Manulife Financial (MFC.TO) and Sun Life Financial (SLF.TO) ended on a firm note.

In the materials section, Teck Resources (TECK.B.TO) gained more than 6.5%. Hudbay Minerals (HBM.TO) ended 5.8% up and Lundin Mining Corp (LUN.TO) advanced nearly 5%. Methanex (MX.TO), First Quantum Minerals (FM.TO) and Interfor Corp (IFP.TO) also closed with strong gains.

On the economic front, Canada new home prices rose 0.1% in August of 2019, following three consecutive months of declines while markets had forecast prices to remain unchanged.

U.S. stocks ended higher again on trade talks optimism. The major averages pulled back off their best levels of the day but remained firmly positive. The Dow, the Nasdaq and the S&P 500 gained 0.6% each.

The mood was positive after President Donald Trump revealed he plans to meet with Chinese Vice Premier Liu He as part of high-level U.S.-China trade talks.

"Big day of negotiations with China. They want to make a deal, but do I? I meet with the Vice Premier tomorrow at The White House," Trump tweeted.

The tweet from Trump offset concerns generated by reports suggesting Liu could leave Washington earlier than originally planned.

Adding to the positive sentiment, Liu told Chinese state-run media Xinhua the Chinese delegation has come to the talks with "great sincerity and is willing to make serious exchanges with the U.S. on issues of common concern."

"On the basis of equality and mutual respect, China is willing to reach consensus with the U.S. through this round of consultations on issues of mutual concern to prevent further escalation and spread of friction," Liu said.

Markets across the Asia-Pacific region and Europe also ended higher on Thursday on hopes the U.S. and China will at least agree on an interim trade deal.

In commodities, West Texas Intermediate Crude oil futures for November ended up $0.96, or about 1.8%, at $53.55 a barrel, the highest settlement since October 1.

Gold futures for December ended down $11.90, or about 0.8%, at $1,500.90 an ounce, after dropping to a low of $1,496.20 in mid morning trades.

Silver futures for December ended down $0.208, at $17.602 an ounce, while Copper futures for December settled at $2.6135 per pound, gaining $0.0455 for the session.

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