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Canadian Market Recovers After Weak Start

The Canadian stock market edged higher after opening on a negative note Tuesday morning, with investors largely staying cautious ahead of the U.S. Federal Reserve Chairman Jerome Powell's testimony to Congress on July 10 & 11.

Investors were also digesting data on Canadian housing starts and building permits.

The benchmark S&P/TSX Composite Index was up 56.23 points, or 0.34%, at 16,519.18, after having declined to a low of 16,421.66 in early trades.

Healthcare and mining stocks were weak, while consumer staples, information technology and energy sections saw some strong buying. Financial, industrial and consumer discretionary shares exhibited a mixed trend.

In the consumer staples space, Alimentation Couche-Tard Inc. (ATD.B.TO) shares gained 1.75%. Empire Co. (EMP.A.TO) and The North West Company (NWC.TO) were both up by about 1.6%, Maple Leaf Foods (MFI.TO) gained 1.3% and Weston George (WN.TO) advanced 1%.

Among information technology stocks, BlackBerry (BB.TO) moved up 3.2%. Photon Control (PHO.TO) advanced 2.75% and Absolute Software (ABT.TO) climbed up 2.3%. Open Text Corporation (OTEX.TO) and CGI Group (GIB.A.TO) were up 2% and 1.5%, respectively. Constellation Software (CSU.TO), Descartes Systems Group (DSG.TO), Exfo Inc. (EXF.TO) and Sierra Wireless (SW.TO) posted modest gains.

In the energy section, Canadian Natural Gas (CNQ.TO) and MEG Energy Corp. (MEG.TO) gained 2.5% and 2.3%, respectively. Suncor Energy (SU.TO) climbed up 2.1%, Parex Resources (PXT.TO) advanced 1.85% and Imperial Oil (IMO.TO) added 1.7%. Crescent Point Energy (CPG.TO) and Cenovus Energy (CVE.TO) gained 1% and 1.3%, respectively.

Among the stocks in the Materials Index, First Quantum Minerals (FM.TO) plunged nearly 10%. Interfor Corp. (IFP.TO), Hudbay Minerals (HBM.TO), West Fraser Timber (WFT.TO), Canfor Corp. (CFP.TO), Lundin Mining Corp. (LUN.TO) and Norbord Inc. (OSB.TO) shed 2.5 to 5%.

In the healthcare space, CannTrust Holdings (TRST.TO) plunged more than 7%, extending recent losses.

Canopy Growth Corp (WEED.TO) declined 2.5%. Hexo Corp. (HEXO.TO) and Aurora Cannabis (ACB.TO) lost 1.3% and 1.1%, respectively.

Data released by Canada Mortgage and Housing Corp. showed Canadian housing starts rose to the highest level in more than a year in June. The data said housing starts were up an annualized 245,657 units in June, an increase of 25% from downwardly revised 196,800 units in May, and topping expectations for an increase of 210,000 units.

Another data said the value of building permits in Canada fell 13% to C$8.2 billion in May 2019, from an uwardly revised 16% gain in the previous month. Market had expected the value of building permits to fall 2.5% in May.

In U.S., stocks were turning in a lackluster performance this morning, with traders staying reluctant to make significant moves ahead of the Congressional testimony from Jerome Powell. Powell's comments are awaited by investors for clues about the outlook for interest rates.

European markets were mostly weak and markets across the Asia-Pacific region settled lower.

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