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Canadian Shares Sliding Sharply On Virus Jitters, IMF's Forecast

Canadian stocks are deep down in negative territory a few minutes past noon on Wednesday, sliding sharply after a weak start amid growing worries about the economy after the International Monetary Fund (IMF) released its outlook for global growth this year.

With reports showing a marked surge in coronavirus infections in the U.S. and several other countries across the world, worries about growth have risen despite recent massive stimulus announcements from central banks and governments, and some better than expected economic data from U.S. and Europe.

Energy, healthcare, consumer discretionary, materials, financial and industrial shares are down sharply. Several stocks from real estate, telecommunications and information technology sectors are sliding as well.

The benchmark S&P/TSX Composite Index is down 376.40 points or 2.4% at 15,188.27, after hitting a low of 15,144.42.

Air Canada (AC.TO), TC Energy Corporation (TRP.TO), Shopify Inc. (SHOP.TO), Canadian Natural Resources (CNQ.TO), Manulife Financial Corporation (MFC.TO), Bank of Montreal (BMO.TO), Fairfax Financial Holdings (FFH.TO), Toronto-Dominion Bank (TD.TO), Bank of Nova Scotia (BNS.TO), Canadian Imperial Bank of Commerce (CM.TO) and Enbridge (ENB.TO) are down 2 to 4.3% on strong volumes.

Cargojet (CJT.TO), Kinaxis Inc. (KXS.TO), Colliers International (CIGI.TO), Franco-Nevada Corporation (FNV.TO) and Senvest Capital (SEC.TO) are some of the other notable losers.

Among the few notable gainers, Torex Gold Resources (TXG.TO), Empire Company (EMP.A.TO) and Loblaw Companies (L.TO) are up 4.3%, 1.7% and 0.8%, respectively.

The IMF has has sharply lowered its forecast for global growth this year. It predicts that the global economy will shrink 4.9% this year, significantly worse than the 3% drop it had estimated in its previous report in April. It would be the worst annual contraction since immediately after the Second World War.

For the United States, the IMF predicts that gross domestic product will fall as much as 8% this year, even more than its April estimate of a 5.9% drop.

For Canada, which counts the United States as its biggest trading partner, the IMF estimates GDP will contract 8.4% this year.

White House health advisor Dr. Anthony Fauci warned Tuesday that parts of the U.S. are beginning to see a "disturbing surge" of Covid-19 cases. Fauci told Congress that the next two weeks would be critical in trying to keep the virus under control.

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