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Canadian Shares Recover After A Weak Start

After a weak start, the Canadian stock market recovered and emerged into positive territory Tuesday morning, led by gains in energy shares.

The mood was cautious with investors looking ahead to the upcoming monetary policy meetings of European Central Bank, Bank of Japan and the Federal Reserve.

A lack of positive news on the trade front and uncertainty about Brexit too contributed to the somewhat lackluster moves early on in the session.

The benchmark S&P/TSX Composite Index was up 14.51 points, or 0.1%, at 16,509.60, a few minutes past noon. Earlier, after declining to a low of 16,459.40, the index recovered to 16,521.81.

Information technology shares were weak. Shares from utilities, consumer discretionary and industrial sections were also exhibiting weakness.

Among energy shares, Kelt Exploration (KEL.TO), Severn Generations Energy (VII.TO), Whitecap Resources (WCP.TO), Crescent Point Energy (CPG.TO), Canadian Natural Resources (CNQ.TO), Husky Energy (HSE.TO), Enerplus Corp (ERF.TO) and Tourmaline Oil Corp (TOU.TO) gained 3 to 5%.

Encana Corp (ECA.TO) advanced 2.3%. Encana announced that Michael McAllister has been promoted as the president of the company and Greg Givens has been appointed the chief operating officer. McAllister previously served as the company's executive vice president and chief operating officer, while Givens previously served as vice president and general manager of Texas Operations.

Suncor Energy (SU.TO) gained 2.5%. The company said it will spend $1.4 billion to replace its coke-fired boilers with two cogeneration units at its oilsands base plant north of Fort McMurray, Alta. The company says the units will provide steam generation for its extraction and upgrading operations and generate 800 megawatts of power.

Cenovus Energy (CVE.TO), Enerflex (EFX.TO), PrairieSky Royalty (PSK.TO), Imperial Oil (IMO.TO) and Shawcor (SCL.TO) also rose sharply.

Among miners, Methanex Corp (MX.TO), Hudbay Minerals (HBM.TO), Lundin Mining (LUN.TO), First Quantum Minerals (FM.TO) and Teck Resources (TECK.B.TO) were up with sharp gains.

In the information technology space, Shopify Inc. (SHOP.TO) declined more than 4% after the company announced that it will buy fulfillment solutions company 6 River Systems Inc. in a US$450 million cash and share deal as it looks to push further into the warehousing and shipping side of online retail.

Kinaxis Inc. (KXS.TO) shed about 3%, CGI Group (GIB.A.TO) eased 1.75% and Opex Text Corporation (OTEX.TO) was down 1.6%, while Constellation Software (CSU.TO) was lower by about 1.5%.

In economic news, data released by the government this morning showed housing starts in Canada increased to 226,639 units in August, up 1.9% from a month earlier.

Meanwhile, the value of building permits in Canada rose 3% from a year earlier to C$ 8.3 billion in July 2019, rebounding from a downwardly revised 3.1% fall in the previous month and beating market expectations of a 2.9% gain.

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