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Canadian Shares Losing Ground After Recent Steep Climb

The Canadian stock market is down sharply Friday morning due to profit taking after three successive days of hefty gains, and worries about the economic impact of the COVID-19 spread.

Reports showing a sharp rise in new infections and fatalities in the U.S. due to the virus are causing concerns.

Falling crude oil and gold prices are also weighing on stocks.

The Bank of Canada cut its key interest target by half a percentage point to 0.25% in an unscheduled rate announcement this morning.

The central bank said its decision to lower rates is aimed at cushioning the economic shocks from COVID-19 and a sharp drop in oil prices by easing the cost of borrowing. The bank added that providing credit in the economy for businesses that need it should help lay the foundation for the economy's return to normalcy.

The benchmark S&P/TSX Composite Index, which nosedived to 12,662.55, losing nearly 700 points in the process, is currently down 536.21 points, or 4.01%, at 12,834.96.

Energy stocks are tanking, dragging the Capped Energy Index down by 8.4%. Shares from consumer discretionary, information technology, financial and utilities are crashing as well, resulting in the respective sectoral indices going down by 5 to 6%.

Industrial, consumer staples and materials indices are down 3.2 to 3.7%. Healthcare shares are finding modest support.

Stocks are seeing a free fall on Wall Street as well. The major averages are all down sharply. The Dow is down 3.3%, while the Nasdaq and the S&P 500 are both lower by almost 3%.

The major European markets are heading to a weak close, with the benchmark indices of the U.K., France and Germany losing 3 to 5.4%. The pan European Stoxx 600 is declining 3.3%.

West Texas Intermediate Crude oil futures are down $1.12, or almost 5%, at $21.48 a barrel.

Gold futures are declining $26.50, or 1.6%, at $1,624.70 an ounce.

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