Canadian stocks moved sharply lower during trading on Friday

Image Source : Krish Capital Pty Ltd

Index Update: After plunging by 3.8 percent on Thursday, the benchmark S&P/TSX Composite Index plummeted 1,142.30 points or 4.7 percent to a nearly seven-month closing low of 23,193.47.

Macro Update: Canada and the European Union are also purportedly preparing countermeasures, leading to concerns about a trade war that could fuel inflation and damage the global economy.

China's finance ministry announced a 34 percent tariff will be imposed on all imported goods originating from the U.S. beginning on April 10th

On the economic front, Statistics Canada released a report showing Canadian employment fell by 33,000 jobs in March. The unemployment rate also ticked up 0.1 percentage point to 6.7 percent.

Top Losers: Canadian energy giants suffered steep losses, with Canadian Natural dropping 6.7%, Suncor falling 8.8%, Imperial Oil down 6.7%, and Cenovus plunging 11.9%. Moreover, heavyweight tech, financial, and mining equities such as Shopify (-5.6%), Brookfield (-7.2%), and Wheaton Precious (-8.8%) also recorded significant declines.

Our Stance: The index continues to trade below its 21-period Simple Moving Average (SMA), reinforcing the prevailing downtrend and signaling persistent selling pressure. The key support level to watch is 24,100, which aligns with a critical horizontal trendline. Holding this level could provide a base for stabilization and a potential recovery. However, a decisive break below it could trigger further losses, with downside targets at 23,700 and 23,500.

Commodity Update: On Monday, the yen and Swiss franc strengthened as investors fled to safe havens, while the risk-sensitive Australian dollar tumbled amid escalating trade tensions. U.S. President Donald Trump’s expanded tariffs deepened fears of a global recession. Commodities responded with gold rising 0.32% to $3,045.35, silver up 3.32% to $30.20, and copper gaining 2.17% to $8,940.00. Brent crude fell 2.63% to $63.93 as China and the EU signalled retaliation, intensifying global trade war concerns.

Technical Update: On Friday, the S&P/TSX Composite Index tumbled 1,142.30 points (-4.69%) to close at 23,193.47, driven primarily by a steep 8.04% drop in the basic materials sector, which significantly dampened market sentiment. The index remains below its 21-period Simple Moving Average (SMA), underscoring the ongoing downtrend and sustained selling pressure. Technical indicators suggest caution. The Relative Strength Index (RSI) slipped to 29.75, approaching oversold territory. While this could pave the way for a short-term bounce, downside risks remain pronounced. The key support level to monitor is 22,500—a major horizontal trendline. If this level holds, it may serve as a foundation for stabilization and a potential rebound. However, a firm breakdown below this support could open the door to further losses, with the next downside targets 22,000 and 21,600. Investor sentiment remains fragile, with market participants closely watching macroeconomic data and sector-specific catalysts for direction.