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TSX May Start Slightly Changed Amid Ongoing Trade Talks; TransCanada Downgrade Could Weigh

Canada's benchmark index looked set to open slightly changed on Thursday, as investors observed with caution the ongoing trade discussions between the US and China in Washington. TransCanada's (TRP.TO) credit rating downgrade, however, could hurt energy stocks.

Donald Trump is expected to meet China's vice-premier on Thursday as the two countries continue trade talks aimed at reaching an armistice in the tariff war that threatens to cut global growth and oil demand. A settlement in the dispute will reassure traders that demand growth will continue even as U.S. production continues to rise.

Meanwhile, Moody's has downgraded TransCanada Pipelines Limited to Baa1 from A3, affecting approximately $38 billion of debt. "TransCanada's financial profile has been weak for several years," said Gavin MacFarlane, a Moody's vice president and senior credit officer. "The downgrade reflects our expectation that debt to EBITDA will improve from 5.6x at the end of 2018, but remain around 5x in 2019 and 2020."

The TSX closed up by 15 points on Wednesday, led higher by utilities and consumer discretionary.

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