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TSX Recovers After Sharp Setback, Ends Marginally Down

After a weak start and a subsequent sharp plunge in mid morning trades on Friday, the Canadian stock market recovered gradually and emerged into positive territory for a brief while towards the closing minutes but ended the day marginally down.

The U.S. decision to increase tariffs from 10% to 25% on $200 billion worth of Chinese goods and China's response that it would retaliate by imposing sanctions on U.S. goods sent stock prices crashing this morning.

Stocks recovered lost ground after U.S. Treasury Secretary Steven Mnuchin wrapped up a second day of trade talks, calling the discussions "constructive."

Data showing a drop in Canadian unemployment too contributed to the market's recovery.

The benchmark S&P/TSX Composite Index ended down 24.20 points, or 0.15%, at 16,297.55. The index scaled a low of 16,138.98 and a high of 16,351.72 in the session.

The index ended the week down 1.2%, the largest weekly loss since the third week of December 2018.

Financial, information technology, consumer staples and industrial shares recovered well and pared most of their losses. Materials shares found some support, while energy and consumer discretionary stocks were weak.

Manulife Financial Corporation (MFC.TO), Green Organic Dutchman Holdings (TGOD.TO), Barrick Gold Corporation (ABX.TO), Encana Corporation (ECA.TO) and Hexo Corp. (HEXO.TO) were among the prominent losers in the session.

Lundin Mining Corporation (LUN.TO), Aphria Inc. (APHA.TO), CannTrust Holdings (TRST.TO) and Brookfield Asset Management (BAM.A.TO) ended stronger by 2 to 6%.

Village Farms International, Inc. (VFF.TO) shares gained nearly 15% after the company reported earnings per share of US$0.16 per share for the quarter ended March 2019 compared to a loss per share of US$0.03 in the year-ago quarter.

In economic news, employment in Canada increased by 106,500 in April 2019, beating forecasts by a substantial margin.

Meanwhile, the unemployment rate in Canada fell to 5.7% in April 2019 from 5.8% in the previous month and slightly below market expectations of 5.8%.

The value of building permits in Canada increased 2.1% from the previous month to CAD 8.1 billion in March of 2019, after a downwardly revised 5.1% fall in February and below market expectations of a 2.8% increase.

U.S. stocks rebounded strongly after a severe setback. The Dow climbed 114.01 points or 0.4% to 25,942.37, the Nasdaq inched up 6.35 points or 0.1% to 7,916.94 and the S&P 500 rose 10.68 points or 0.4% to 2,881.40.

Despite the U.S. increasing the tariffs on over $200 billion worth of Chinese goods, European stocks ended higher on Friday, rebounding fairly well after posting notable losses in the previous session.

Encouraging economic data from Germany and the U.K. contributed significantly to the gains in the European markets.

Asian stocks ended mostly higher on Friday as investors shrugged off the U.S. decision to increase tariffs on $200 billion worth of Chinese goods and remained hopeful of a breakthrough in trade talks.

In commodities, West Texas Intermediate Crude oil futures for June ended lower by 4 cents at $61.66 a barrel, after rising to a high of $62.49 a barrel intraday.

Gold futures for June ended up $2.20, or 0.2%, at $1,287.40 an ounce.

Silver futures for July ended up $0.017, at $14.790 an ounce, while Copper futures for July settled at $2.7745, up $0.0030 from previous close.

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