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At midday: TSX, Wall Street lower on worries over escalating U.S.-China trade war

Canada’s main stock index fell on Wednesday on concerns of a full-scale trade war between the United States and China after President Donald Trump threatened to impose more levies on Chinese goods.

The Toronto Stock Exchange’s S&P/TSX composite index was down 122.40 points, or 0.74 per cent, at 16,426.32.

The Bank of Canada raised interest rates and said further gradual rate hikes will be warranted, but warned mounting trade tensions will have a larger impact on investment and exports than previously thought.

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The Canadian dollar weakened against the greenback as U.S.-China trade tensions pressured stocks and commodity prices. It was at trading at 76.14 cents US.

China accused the U.S. of bullying and warned it would hit back after the Trump administration raised the stakes in their trade dispute, threatening 10 per cent tariffs on US$200-billion of Chinese goods.

All of the index’s 11 major sectors were in the red, in broad based declines across sectors.

U.S. crude prices were down 1.1 per cent and Brent crude lost 2.1 per cent. Oil prices fell after Libyan ports reopened and U.S. President Donald Trump threatened to impose more tariffs on China.

OPEC forecast world demand for its crude will decline next year as growth in consumption slows and rivals pump more, pointing to a market surplus despite an OPEC-led pact to restrain supplies.

The financials sector slipped 0.3 per cent. The materials sector lost 1.3 per cent as gold and copper prices fell due to trade war worries.

On the TSX, 37 issues were higher, while 201 issues declined for a 5.43-to-1 ratio to the downside, with 15.83 million shares traded.

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Top percentage gainers on the TSX were B2Gold Corp., which jumped 2.5 per cent and Vermilion Energy, which rose 1.7 per cent.

Copper miner First Quantum Minerals slipped 5.5 per cent, the top decliner on the TSX, as copper prices fell followed by diversified miner, Teck Resources’ 4.3-per-cent decline.

The most heavily traded shares by volume were Bombardier, Aurora Cannabis, and B2Gold Corp.

U.S stocks slid on Wednesday amid a broad selloff on escalating trade war tensions after the United States threatened to impose tariffs on an additional $200 billion worth of Chinese goods.

The Dow Jones Industrial Average was down 173.70 points, or 0.7 per cent, at 24,745.96, the S&P 500 was down 16.44 points, or 0.59 per cent, at 2,777.40 and the Nasdaq Composite was down 45.49 points, or 0.59 per cent, at 7,713.71.

Washington on Tuesday issued a list of thousands of Chinese imports that the Trump administration wants to target with new tariffs. In response, China accused the United States of bullying and warned it would hit back.

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“Unfortunately the markets haven’t come to grips with the current levels of trade policies and tariffs,” said Art Hogan, chief market strategist at B. Riley FBR in New York

“Concerns over trade and trade wars are really having an adverse effect, less so on the U.S. markets than the international markets, but it is certainly taking a bite.”

Adding to tensions was the NATO summit in Brussels, where President Donald Trump accused Germany of being a “captive” of Russia. He also wants Europeans to pay more for their own defense.

The biggest drags on the blue-chip Dow were Boeing, 3M, Caterpillar and United Technologies. Their shares were down between 1.2 per cent and 2 per cent.

Ten of the 11 major sectors were lower. The S&P industrials sector tumbled 1.22 per cent, making it the biggest decliner and drag on the benchmark S&P.

The technology sector slid 0.21 per cent. Chipmakers, which largely depend on China for their revenue, weighed the most, with the Philadelphia semiconductor index falling 1.43 per cent.

The defensive utilities sector was the only one in the positive territory, with a 0.35 per cent gain.

21st Century Fox fell 2.2 per cent after the media company raised its offer for Britain’s Sky, seeing off rival bidder Comcast for now. Comcast rose 1.5 per cent.

Fastenal’s shares rose 5.4 per cent, the most on the S&P, after the industrial products distributor’s second quarter revenue and profit topped estimates.

The next biggest gainer was TripAdvisor, which rose 3.4 per cent on a Barclays rating upgrade.

With files from Reuters

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