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Canada’s main stock index fell on Friday, led by financial stocks as investors gauged the much stronger-than-expected inflation data for pace of interest rate hikes by the Bank of Canada.

At 9:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 16.55 points, or 0.1 per cent, at 16,209.1.

Canada’s annual inflation rate accelerated to 3.0 per cent in July from 2.5 per cent in June as energy prices climbed, while one of the Bank of Canada’s preferred measures of core inflation also ticked higher, Statistics Canada said on Friday.

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The inflation rate was much stronger than the 2.5-per-cent forecast by analysts in a Reuters poll. The Bank of Canada, which raised interest rates in July for the fourth time in a year, has an inflation target of 2.0 per cent.

The Nasdaq Composite opened lower on Friday as weak forecasts from Applied Materials and Nvidia weighed on chip stocks, while rising crude prices boosted energy stocks and helped the S&P and the Dow Industrials cut their losses.

The Dow Jones Industrial Average dipped 7.93 points, or 0.03 per cent, at the open to 25,550.80, while the S&P 500 edged lower by 2.37 points, or 0.08 per cent, at 2,838.32.

The Nasdaq Composite dropped 19.88 points, or 0.25 per cent, to 7,786.64 at the opening bell.

Shares of Nvidia dropped 3.5 per cent in early trading after the chipmaker said cryptocurrency-fueled demand had dried up and forecast current-quarter sales below Wall Street estimates.

Applied Materials slid 8.4 per cent after the world’s largest supplier of chip equipment forecast current-quarter results below estimates, adding to fears that a two-year chip boom may be losing steam.

Micron fell 2.9 per cent, while Intel slipped 1.6 per cent. Dutch chip equipment maker ASML’s U.S.-listed shares dropped 2.1 per cent, while Lam Research fell 3.6 per cent.

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The lira, already lower in the session, weakened further on a report that a Turkish court rejected an appeal for the release of detained American pastor Andrew Brunson, raising prospects of further U.S. sanctions.

“The situation in Turkey is troubling and until the rhetoric in the back-and-forth calms down it’ll be on the forefront of investors minds,” said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville, New Jersey.

“People will remove equity exposure amid the uncertainty especially given Turkey’s public holidays next week.”

Fresh troubles in U.S.-Turkey relations dulled Thursday’s market optimism, which was due to waning trade worries after the United States and China said they would hold fresh talks later this month.

Deere fell 3 per cent after the U.S. tractor maker’s third-quarter profit missed analysts’ expectations due to higher raw material and freight costs.

Nordstrom jumped 7.9 per cent after the department store chain’s quarterly same-store sales growth beat estimates, helped by healthy online sales.

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On a thin day for economic data, the University Of Michigan consumer sentiment index is expected at 10 a.m. ET. rs I/B/E/S.

On a thin day for economic data, the University Of Michigan consumer sentiment index is expected at 10 a.m. ET. (Reporting by Shreyashi Sanyal in Bengaluru; Editing by Arun Koyyur

Oil prices rose on Friday but were heading for yet another weekly decline as concerns intensified that trade disputes and slowing global economic growth could hit demand for petroleum products.

Brent crude oil futures were up 92 cents at $72.25 a barrel, after rising over $1 to hit a high of $72.44 a barrel. U.S. West Texas Intermediate (WTI) crude futures rose 59 cents to $66.05.

Brent was still heading for a 1-percent decline this week, a third consecutive weekly drop. WTI, meanwhile, is on track for a seventh week of losses with a fall of more than 2 percent.

The main drag on prices was the darkening economic outlook on the back of trade tensions between the United States and China, and weakening emerging market currencies that are weighing on growth and fuel consumption, traders and analysts said.

U.S. investment bank Jefferies said on Friday that there was a “lack of demand” for crude oil and refined products from emerging markets, while Singaporean bank DBS said that Chinese data showed a “steady decline” in activity and that “the economy is facing added headwinds due to rising trade tensions.”

Bank MUFG, meanwhile, said that the weakening Turkish lira will constrain further growth in gasoline and diesel demand this year.

“Although emerging market contagion and China slowdown fears seem somewhat overstated, neither fundamental nor sentiment should provide support for higher commodity prices,” Julius Baer Head of Macro and Commodity Research Norbert Rücker said.

Furthermore, just as demand seems to be slowing, supply looks to be rising, increasing the drag on markets.

Reuters

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