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Canadian Shares Recovering After Weak Start

The Canadian stock market recovered from early lows, but was still down in negative territory Monday late morning with investors largely making cautious moves amid lingering worries about U.S.-China trade dispute.

The benchmark S&P/TSX Composite Index, which declined to 16,275.18 in early trades, losing about 66 points in the process, was down 14.08 points, or 0.08%, at 16,327.26 a few minutes before noon.

Energy, consumer discretionary, healthare and financial shares weak. Mining stocks gained in strength, while shares from rest of the sectors were exhibiting a mixed trend.

Enerflex Ltd. (EFX.TO) shares plunged 10%. Nuvista Energy (NVA.TO) shed about 7%, while Precision Drilling (PD.TO), Ensign Energy Services (ESI.TO) and Shawcor (SCL.TO) lost 4 to 5%.

Vermillion Energy (VET.TO), Canadian Natural Resources (CNQ.TO), Baytex Energy (BTE.TO), MEG Energy (MEG.TO), Crescent Point Energy (CPG.TO), Tourmaline Oil Corp. (TOU.TO), Enerplus Corp. (ERF.TO), ARC Resources (ARX.TO), Husky Energy (HSE.TO) and Parex Resources (PXT.TO) were down 1 to 2%.

In the consumer discretionary space, shares of The Star Group Inc. (TSGI.TO) tumbled 12% after the company slashed its adjusted earnings and revenue guidance for the full year 2019. For fiscal 2019, the company now projects adjusted earnings in a range of $1.68 to $1.83 per share on revenues between $2.50 billion and $2.575 billion. Previously, Stars Group expected adjusted earnings in the range of $1.87 to $2.11 per share on revenues between $2.64 billion and $2.765 billion.

Canada Goose Holdings (GOOS.TO) and Great Canadian Gaming Corp. (GC.TO) declined 2.6% and 2.3%, respectively. Brp Inc. (DOO.TO) shed about 1.2%.

Cannabis share CannTrust Holdings (TRST.TO) plummeted 25%. The company said its manufacturing facility in Vaughan, Ontario, has been rated non-compliant by Health Canada.

The company said it was notified by Health Canada on Friday and added that remedial actions were underway. The decision by the regulator was based on an inspection in July following revelations that Health Canada had found the company's greenhouse in Pelham, Ontario, to be non-compliant.

Cronos Group (CRON.TO), Aurora Cannabis (ACB.TO) and Hexo Corp. (HEXO.TO) lost 1 to 1.5%.

Among bank stocks, CDN Western Bank (CWB.TO), Laurentian Bank (LB.TO), Bank of Montreal (BMO.TO), National Bank of Canada (NA.TO), Royal Bank of Canada (RY.TO), Canadian Imperial Bank of Commerce (CM.TO) and Toronto-Dominon Bank (TD.TO) were down 0.6 to 1.5%, while Bank of Nova Scotia (BNS.TO) was down marginally.

In the mining space, Hudbay Minerals (HBM.To) declined 2.4%. Methanex Corp. (MX.TO) and Nutrien (NTR.TO) both were down by about 1.6%.

Worries about the ongoing trade dispute between the U.S. and China have increased after President Donald Trump indicated he feels no sense of urgency to resolve the dispute.

Trump told reporters last Friday that he is "not ready to make a deal" with China and suggested the U.S. could skip the next round of trade talks in September.

The political situation in Hong Kong hurt as well.

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