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Index Update: The S&P/TSX Composite Index closed to a six-week low on Wednesday, as political uncertainty and fears of tariff war rendered the mood bearish. The S&P/TSX Composite Index settled at 24,557.00, losing 562.71 points or 2.24%, one of the biggest single-session drop in several months.
Macro Update: The Fed, which cut interest rate by 25 basis points as widely expected, but the central bank's latest projections suggest rates will be in a range of 3.75 to 4% by the end of 2025 compared to the range of 3.25 to 3.5% forecast in September.
Top Movers: Torex Gold Resources (TXG.TO) climbed more than 7%. Sangoma Technologies (STC.TO), GFL Environmental (GFL.TO), Quebecore Inc (QBR.B.TO), Boyd Group Services (BYD.TO), Canadian Tire Corporation (CTC.TO) and K-Bro Linen (KBL.TO) closed with sharp to moderate gains.
Our Stance: Immediate support for the index is seen at the 24,000 level, which could act as a critical floor in the event of further declines. If the index holds above this level, there could be a possibility for stabilization and a rebound. Given the mixed signals from key sectors and technical indicators, traders will be closely watching for any signs of stability or further weakness in the days ahead
Commodity Update: The U.S. dollar approached a two-year high after the Federal Reserve signalled a slower pace of rate cuts in 2025, with FED Chairman Jerome Powell emphasizing that future reductions depend on progress in controlling inflation. Policymakers now forecast two 25 basis point cuts next year, down from the previous expectation of four. Meanwhile, the yen weakened to a one-month low ahead of a Bank of Japan policy decision. In commodities, gold fell 1.09% to $2,624.30, silver dropped 2.60% to $29.94, copper declined 1.04% to $8,953.50, and oil prices were stable, with Brent crude at $73.06 per barrel.
Technical Update: The S&P/TSX Composite Index closed at 24,557.00 on Wednesday, reflecting a notable 2.24% drop, primarily driven by a 4.46% decline in the technology sector. This weakness in tech has weighed on the broader market, highlighting the sector's growing influence on overall performance. The index remains below its 50-period Simple Moving Average (SMA), signaling that the short-term downtrend persists. Additionally, the Relative Strength Index (RSI) fell to 30.37, indicating that bullish momentum has weakened, and the market is approaching oversold conditions. Traders are now closely monitoring key support levels to gauge the next potential move. Immediate support for the index is seen at the 24,000 level, which could act as a critical floor in the event of further declines. If the index holds above this level, there could be a possibility for stabilization and a rebound, particularly if the energy sector shows signs of recovery. However, if the index breaches this 24,000-support level, the risk of further downside increases, with additional support potentially coming into play at lower levels. The market stands at a pivotal point, with these technical levels likely to dictate whether the downtrend continues or if a reversal could be on the horizon. Given the mixed signals from key sectors and technical indicators, traders will be closely watching for any signs of stability or further weakness in the days ahead.