Energy shares recover after earlier losses from Trans Mountain ruling to close down 0.3%

Canadian energy shares pared earlier losses on Thursdayafter a ruling by the Federal Court of Appealagainst the government's approval of the Trans Mountain pipeline expansion had dragged down the sector.

The move was a major blow to the federal government, which had approved the pipeline's expansion in 2016and sought to buy the project from the Canadian unit of U.S. construction giant Kinder Morgan for $4.5 billion this yearin order toget it built.

During morning trading, energy shares had overtakenmaterial stocks on theS&P/TSXcomposite index to lead the losses, down more than one per cent at one point.

But the sectorpared back losses in the afternoon to close down 0.3 per cent, becomingthefourth biggestdragon the TSXafter health care, materials and real estate stocks.

The energy sector has the second-biggest weighting on the benchmarkindex after the financial sector.

Overall, the Canadian market closeddown 0.1 per cent to16,371.55 points, following its U.S. counterparts as investors worried about global trade.

U.S. stocks took a dive in the afternoonafter reports that U.S. President Donald Trumpwants to move ahead with a plan to impose tariffs on $200 billion US worth of Chinese imports next week.

In Toronto, shares of Cenovus Energy were among the big energy losers, falling as much as five per cent in the morning, before regaining some of that lossto close down two per cent.

Shares of Canadian Natural Resources also fell 1.2per cent while shares of energy heavyweight Suncorlifted the market higher, up 0.6 per cent.

Meanwhile, shares of Kinder Morgan Canada closed up 0.5 per centafter shareholders voted more than 99 per cent in favour of selling the Trans Mountain pipeline to the federal government.

News of the company'sapproval of the sale came shortly after the federal court decision Thursday morning to quash construction approval of the pipeline.