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Energy, Materials Shares Dragging Down Canadian Market

The Canadian stock market, which slipped into the red within minutes of commencement of trade Thursday morning, continues to languish in the red a little past noon, led by losses in materials, energy and healthcare sections.

Despite rising optimism about bigger stimulus from the U.S. following Joe Biden taking charge as the U.S. President, the mood is a bit bearish in the Canadian market amid continued spikes in coronavirus cases globally and tighter lockdown restriction in several places. Profit taking after recent gains, and weak commodity prices to weigh on the market.

The benchmark S&P/TSX Composite Index is down 137.50 points or 0.76% at 17,877.41 about half an hour past noon.

In the energy section, Vermilion Energy (VET.TO), Cenovus Energy (CVE.TO), Seven Generations Energy (VII.TO), PrairieSky Royalty (PSK.TO), Whitecap Resources (WCP.TO), Canadian Natural Resources (CNQ.TO), Enerplus Corp (ERF.TO), Suncor Energy (SU.TO), Tourmaline Oil Corp (TOU.TO) and Arc Resources (ARX.TO) are down 2 to 4%.

Among materials shares, Fortuna Silver Mines (FVI.TO) is declining 6.5%, Torex Gold Resources (TXG.TO), Silvercrest Metals (SIL.TO), Pan American Silver Corp (PAAS.TO), Silvercorp Metals (SVM.TO), MAG Silver Corp (MAG.TO) and Ssr Mining (SSRM.TO) are down 3 to 4.7%.

Eldorado Gold (ELD.TO) is down by about 3.7%. The company announced that it has struck a deal to buy the shares of Quebec exploration company QMX Gold Corp. it doesn't already own in a cash-and-shares transaction worth $132 million or 30 cents per share.

Eldorado, which owns about 17% of the QMX shares, purchased for six cents each in a private placement at the end of 2019, is offering 7.5 cents in cash and 0.01523 of an Eldorado share for the rest.

Trillium Therapeutics Inc. (TRIL.TO), down 6.6%, is the biggest loser in the Healthcare Index. Aurora Cannabis (ACB.TO) is declining 5.2% and Aphria Inc. (APHA.TO) is down by about 5%. Bausch Health Companies (BHC.TO), Chartwell Retirement Residences (CSH.UN.TO), Cronos Group (CRON.TO) and Sienna Senior Living (SIA.TO) are down 1.3 to 1.7%.

On the economic front, data from Automatic Data Processing Inc. (ADP) showed private businesses in Canada shed 28,800 jobs in December of 2020, after cutting 219,800 positions in November. It was the tenth consecutive month of job shedding amid the pandemic crisis.

Data from Statistics Canada said prices of new homes in Canada rose by 0.3% from the previous month in December 2020, following a 0.6% increase in the previous month. Year-on-year, new house prices advanced 4.6% in December, the same pace as in November.

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