Canadian stock market retreated from record highs on Thursday

Image Source : Krish Capital Pty Ltd

Index Update:  After opening just below Wednesday's close, the benchmark S&P/TSX Composite Index, slid for a while but managed to rise and hit an intra-day high of 27,479.01 before noon.
However, unable to hold on the momentum, it slid down for the rest of the trading session to finally settle at 27,372.26, down by 44.15 or 0.16 percent.

Macro Update:  Accusing Canada of failing to check illicit drug entry into the U.S. via US-Canadian borders, U.S. President Donald Trump has threatened to slam Canada with 35 percent levies on top of the already-existing tariffs. Trump has already imposed a 25 percent blanket tariffs on certain Canadian imports and a 50 percent levy on aluminum and steel. Data released by Statistics Canada revealed that retail sales in Canada bounced back by around 1.6 percent in June, month-on-month. Retail sales increased 4.90 percent in May 2025 compared to May 2024, year-on-year. As employment data revealed gain in jobs and a decline in the jobless rates days before, expectations are slim that Bank of Canada will make any changes in the lending rates in their announcement scheduled for July 30.

Top Movers:  Among the individual stocks, Colliers International Group Inc (1.76 percent), Vermillion Energy Inc (3.40 percent), Athabasca Oil Corp (2.99 percent), and Bausch Health Companies Inc (2.44 percent) were the prominent gainers.

Our Stance:  The index is currently testing a critical support zone near 27,000. Holding above this level is crucial for maintaining upward momentum. A decisive break below 27,000 could signal the potential for a retracement, with the next key support levels seen between 26,800 and 26,600 on the daily chart.

Commodity Update:  The dollar held near two-week lows Friday, heading for its largest weekly drop in a month amid U.S. tariff talks and upcoming central bank meetings. Gold dipped 0.23% to $3,365.90, while silver rose 0.61% to $39.46. Copper was nearly flat, up 0.01% at $9,877.10. Brent crude climbed 0.30% to $69.35, supported by hopes of a U.S.-EU trade deal and Russian gasoline export curbs.

Technical Update: 

On Thursday, the S&P/TSX Composite Index posted a modest decline, slipping 44.15 points to close at 27,372.26, a loss of 0.16%. Weighing on performance was the basic materials sector, which fell 1.34% during the session. From a technical perspective, the index remains well-positioned, continuing to trade above its 21-period Simple Moving Average (SMA) a key level that supports the broader bullish trend. The Relative Strength Index (RSI) sits at 67.77, reflecting solid market strength while staying below overbought territory, leaving room for further upside. The index is currently testing a critical support zone near 27,000. Holding above this level is crucial for maintaining upward momentum. A decisive break below 27,000 could signal the potential for a retracement, with the next key support levels seen between 26,800 and 26,600 on the daily chart.