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TSX Fails To Retain Early Gains, Ends Notably Lower

Despite some hectic buying in the energy space, the Canadian stock market ended notably lower on Wednesday, led by losses in information technology and consumer discretionary sections.

Profit taking pushed down prices of technology and consumer sector shares, while a rally in crude oil prices lifted energy stocks. Industrials stocks were among the other notable losers. Healthcare stocks found fairly good support.

The benchmark S&P/TSX Composite Index, which rose to 16,495.59 early on in the session and remained in positive territory till around mid afternoon, slid in the last ninety minutes or so and closed at 16,295.66, losing 135.61 points or 0.83%.

In Canadian economic news, the annual inflation rate was at 0.1% in August 2020, the same as in the previous month and below market expectations of a 0.4% increase Month-on-month, consumer price index decreased 0.1% in August. Core consumer prices increased 0.8% in August of 2020 over the same month in the previous year.

Among the prominent losers in the session, Shopify Inc. (SHOP.TO) declined nearly 5%. Canadian Railway Company (CNR.TO) slid 2.3% and Canadian Pacific Railway (CP.TO) ended down nearly 2%.

Royal Bank of Canada (RY.TO), Toronto-Dominion Bank (TD.TO), BCE Inc. (BCE.TO), National Bank of Canada (NA.TO), Bank of Nova Scotia (BNS.TO) and Bank of Montreal (BMO.TO) lost 0.75 to 1.5%.

Kinaxis Inc. (KXS.TO), West Fraser Timber (WFT.TO), CGI Inc. (GIB.A.TO), Restaurant Brands International (QSR.TO) and BRP Inc. (DOO.TO) also declined sharply.

As widely expected, the U.S. Federal Reserve today decided to keep the target range for the federal funds rate at zero to 0.25%. The projections from Fed officials suggest consumer price inflation will remain below 2% until at least 2023.

The Fed's latest estimates point to a 3.7% contraction in GDP in 2020, reflecting an improvement from the 6.5% plunge forecast in June. However, the Fed downwardly revised its estimates for GDP growth in 2021 and 2022 to 4% and 3%, respectively. GDP growth in 2023 was forecast at 2.5%.

The central bank reiterated its commitment to using its full range of tools to support the U.S. economy in this challenging time.

U.S. stocks pulled back in the final hour and the major averages ended mixed. The Dow inched up 0.1%, while the Nasdaq and S&P 500 ended down 1.3% and 0.5%, respectively.

Stock markets across the Asia-Pacific region ended mixed. Most of the markets in Europe closed higher.

West Texas Intermediate Crude oil futures for December ended up $1.88 or about 4.9% at $40.16 a barrel, after data from EIA showed a larger than expected drop in U.S. crude stockpiles.

Gold futures for December ended up $4.30 or about 0.2% at $1,970.50 an ounce after hitting a high of $1,983.80 earlier in the session.

Silver futures for December ended higher by $0.012 at $27.476 an ounce, while Copper futures for December settled at $3.0610 per pound, down $0.0020 from previous close.

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