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TORONTO, June 30 (Reuters) - Canada's main stock index regained some ground on Tuesday after Monday's precipitous drop, with banks rebounding and rising oil prices helping energy stocks.
The Toronto Stock Exchange's S&P/TSX composite index was up 48.27 points, or 0.33 percent, at 14,538.42 at midmorning. It fell more than 2 percent on Monday.
"Eventually cooler heads prevail and good quality companies look cheaper after a pullback yesterday and investors come back to the markets," said Kevin Headland, director of capital markets and strategy at Manulife Asset Management.
The upside, however, looks limited, Headland said, with data on Tuesday showing the Canadian economy shrank unexpectedly in April.
"Canadian economic growth prospects are muted at best," he said.
Heavily weighted gainers on the index included Suncor Energy Inc, which rose 1.6 percent to C$34.32, and Valeant Pharmaceuticals International Inc, which advanced 0.7 percent to C$274.86.
The index's energy group climbed 0.4 percent, with U.S. crude prices up 1 percent at $58.90 a barrel, while Brent crude added 1.9 percent to $63.17.
Financial shares climbed 0.6 percent. Nine of the index's 10 main sectors were higher, with roughly similar numbers of advancers and decliners.
The mining-heavy materials group retreated 0.5 percent. Biggest weights included First Quantum Minerals Ltd, which fell 2.9 percent to C$16.39, and Teck Resources Ltd , which declined 3.8 percent to C$12.36.
Gold futures fell 0.8 percent to $1,168.90 an ounce , while copper prices declined 1.2 percent to $5,720.50 a tonne.
Headland said North American trading will likely be subdued through the rest of the week ahead of a Greek referendum on the terms of a bailout package on Sunday.
Canadian companies have limited exposure to Greece, but investors are concerned about the fallout across Europe if the country exits the euro zone.
Canadian markets are closed on Wednesday for Canada Day and U.S. markets are closed on Friday for Independence Day.
$1=$1.25 Canadian Reporting by Alastair Sharp; Editing by Chizu Nomiyama; and Peter Galloway