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Index Update: The benchmark S&P/TSX Composite Index closed with a gain of 52.26 points or about 0.2% at 24,588.58.
Macro Update: The U.S Labor Department said its producer price index for final demand crept up by 0.2 percent in December after climbing by 0.4 percent in November. Economists had expected producer prices to rise by 0.3 percent.
Top Movers: The Materials Capped Index climbed nearly 1.5%. Fortuna Silver Mines (FVI.TO), Silvercrest Metals (SIL.TO) and MAG Silver Corp (MAG.TO) gained 6.4 to 7.4%. First Majestic Silver Corp (AG.TO), Kinross Gold Corp (K.TO), New Gold (NGD.TO), Oceanagold Corp (OGC.TO) and Ssr Mining (SSRM.TO) climbed 4 to 5%.
Our Stance: This neutral RSI reading suggests that while the market is not overheating, there is still some strength in the rally, allowing for possible further upside without an immediate risk of a pullback. At present, the index is testing a critical support level around 24,200, a level that will be pivotal in determining the next direction for the market.
Commodity Update: The dollar’s strong rally encountered a setback on Wednesday as traders turned cautious ahead of the U.S. consumer inflation report, leading to reluctance to take on new positions. The dollar’s decline was largely due to December’s producer price index (PPI) data, which was softer than expected, fueling optimism that inflation may ease. This raised hopes that the Federal Reserve could have more room to cut interest rates. In commodities, gold rose 0.28% to $2,689.80, while silver gained 0.28% to $30.43. Copper fell 0.34%, reaching $9,122.50. Brent crude remained steady at $79.95, holding near a four-month high.
Technical Update: On Tuesday, the S&P/TSX Composite Index saw a modest increase, rising 52.26 points to close at 24,588.58, reflecting a 0.21% gain. This uptick highlights strong investor confidence and solid trading activity, particularly within the financial sector, which saw a 0.34% boost. This positive movement was primarily driven by optimism in financial stocks, which continue to support market growth. However, from a technical standpoint, the index remains below its 21-period Simple Moving Average (SMA), suggesting a bearish sentiment in the near-term. This positioning indicates that while the index is making some gains, the broader trend is still somewhat negative, leaving room for caution. The Relative Strength Index (RSI), currently at 40.14, shows that the market is not in an overbought condition, meaning there is potential for further upward movement. This neutral RSI reading suggests that while the market is not overheating, there is still some strength in the rally, allowing for possible further upside without an immediate risk of a pullback. At present, the index is testing a critical support level around 24,200, a level that will be pivotal in determining the next direction for the market.