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CANADA STOCKS-TSX flat ahead of Fed decision; commodity-linked shares weigh

(Updates prices, adds analysts’ comments)

Nov 3 (Reuters) - Canada’s main stock index was subdued on Wednesday, ahead of an expected move by the U.S. Federal Reserve to trim pandemic-era stimulus, with weakness in energy and mining stocks also weighing on sentiment.

At 9:46 a.m. ET (13:46 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was down 4.2 points, or 0.02%, at 21,165.81.

The Fed is expected to announce the tapering of its $120 billion-a-month asset purchase programme in its policy statement later in the day, a move widely seen as marking a new chapter in the world’s policy response to COVID-19.

“If the Fed accelerates timetable like the Bank of Canada did, then people would probably see that as hawkish and you could see the U.S. dollar go up which could push down other currencies and commodities, and that could possibly impact Canada,” said Colin Cieszynski, chief market strategist, SIA Wealth.

The energy sector fell 0.1% and extended losses for a second straight session. Oil prices slipped nearly 3% after industry data pointed to a big build in crude oil and distillate stocks in the United States.

However, losses in the sub-sector index were limited by a 3.5% rise in Cenovus Energy Inc shares after the oil producer said it would double its dividend and buy back shares.

The benchmark index retreated from recent record highs on concerns that persisting supply chain disruptions could weigh on corporate earnings. However, Gregory Taylor, portfolio manager at Purpose Investments, said he was expecting the index to stretch its winning streak into November, which is considered a seasonally strong month.

The materials sector, which includes precious and base metals miners and fertilizer companies, lost 0.8% as gold futures fell 1.2% to $1,767.8 an ounce.

HIGHLIGHTS

Uranium miners Cameco Corp and Denison Mines Corp were the biggest percentage gainers on the index.

The TSX posted 11 new 52-week highs and no new lows.

Across all Canadian issues there were 56 new 52-week highs and 18 new lows, with total volume of 42.10 million shares. (Reporting by Amal S in Bengaluru; Editing by Anil D’Silva)

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