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Canadian Market Recovers After Weak Start

The Canadian stock market recovered after a weak start on Friday led by gains in materials and industrials sections. Energy stocks, which opened weak, regained some lost ground subsequently.

The weak start was due to rising geopolitical tensions and data showing a substantial slowdown in China's industrial output in the month of May. Selling in technology stocks due to warning of a slowdown in chip demand by leading semiconductor manufacturer Broadcom Inc. weighed as well.

The benchmark S&P/TSX Composite Index was up 31.79 points, or 0.2%, at 16,271.05, recovering well from an early low of 16,190.89.

In the materials space, Norbord (OSB.TO) rose 6.75%, Canfor Corp. (CFP.TO) jumped 3% and Almos Gold (AGI.TO) gained 2.8%.

Interfor Corp. (IFP.TO), Eldorado Gold (ELD.TO), West Fraser Timber (WFT.TO), Iamgold Corp. (IMG.TO) and Novagold (NG.TO) were up 2 to 2.5%. Yamana Gold (YRI.TO), Barrick Gold Corp. (ABX.TO) and Kirkland Lake Gold (KL.TO) also moved notably higher.

Industrials shares Richelieu Hardware (RCH.TO), Westshore Terminals (WTE.TO), Ats Automation (ATA.TO), CAE Inc. (CAE.TO) and Waste Connections (WCN.TO) gained 0.5 to 1.5%.

In the energy space, Parex Resources (PXT.TO) gained 2.5%, Imperial Oil (IMO.TO) moved up 1.5% and Crescent Point Energy (CPG.TO) advanced 1.3%. Cenovus Energy (CVE.TO), Suncor Energy (SU.TO) and Kelt Exploration (KEL.TO) also moved into positive territory.

Meanwhile, MEG Energy (MEG.TO) and Precision Drilling Corporation (PD.TO) fell 4% and 3.4%, respectively. Encana Corporation (ECA.TO) shed about 2.8%. Enerplus Corp. (ERF.TO), Tourmaline Oil Corp. (TOU.TO), ARC Resources (ARX.TO) and Husky Energy (HSE.TO) also posted losses.

In the information technology space, Blackberry (BB.TO) declined nearly 2%. Celestica Inc. (CLS.TO), Sierra Wireless (SW.TO) and Shopify Inc. (SHOP.TO) lost 0.7 to 1%.

Among bank stocks, Canadian Imperial Bank of Commerce (CM.TO), Bank of Montreal (BMO.TO) and Royal Bank of Canada (RY.TO) were up marginally. Bank of Nova Scotia (BNS.TO), National Bank of Canada (NA.TO) and Toronto-Dominion Bank (TD.TO) posted small gains.

On the economic front, a report from the Canadian Real Estate Association said national home sales rose 1.9% month-over-month in May, while actual activity was up 6.7% year-over-year.

U.S. stocks were trading weak on trade concerns and troubling forecast from Broadcom.

The markets in Europe and across the Asia-Pacific region ended weak on trade worries and disappointing data on China's industrial output growth.

The ongoing U.S.-China trade dispute has resulted in the pace of China's industrial output growth slowing down substantially in May.

Data from the National Bureau of Statistics showed that China's industrial production advanced 5% year-on-year in May, while growth was expected to remain stable at 5.4%.

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