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Index Update: The benchmark S&P/TSX Composite Index, which plunged nearly 800 points to 24,742.92 in early trades, ended the day's session with a loss of 291.34 points or 1.14% at 25,241.76.
Macro Update:On the economic front, a report from S&P Global said, the S&P Global Canada Manufacturing PMI fell to 51.6 in January, down from 52.2 a month earlier, signaling a slower expansion. The reading dropped for a fifth straight month.
Top Movers: Equinox Gold Corp (EQX.TO) climbed 8.7%. Aura Minerals (ORA.TO) rallied 6.5%. Iamgold Corp (IMG.TO), Pan American Silver Corp (PAAS.TO), Wesdome Gold Mines (WDO.TO), Alamos Gold Inc (AGI.TO), Agnico Eagle Mines (AEM.TO), Kinaxis Inc (KXS.TO), Dundee Precious Metals (DPM.TO), Seabridge Gold (SEA.TO), Lundin Gold (LUG.TO), Waste Connections (WCN.TO) and Wheaton Precious Metals (WPM.TO) also moved up sharply.
Our Stance: Looking ahead, traders are closely monitoring the 25,000 level as a critical support zone. If the index manages to hold above this threshold, there may be potential for a recovery. However, a move below the 25,000 mark would heighten concerns of further declines.
Commodity Update: The U.S. dollar and oil declined on Tuesday following President Donald Trump's decision to pause new tariffs on Mexico for a month. This decision came after Mexico agreed to send 10,000 National Guard members to its northern border to curb illegal drug flows. The U.S. and Mexico will use the next month to negotiate further. In commodities, gold fell 0.05% to $2,855.40, silver rose 0.05% to $32.54, and copper advanced 0.46% to $9,172.50. Brent crude dropped 0.50% to $75.55. Investors are awaiting U.S. Non-Farm Payroll data for clearer rate direction.
Technical Update: The S&P/TSX Composite Index experienced a decline of 1.14%, closing at 25,241.76, reflecting ongoing market volatility. A key factor in the drop was a significant 2.45% slump in the healthcare sector, which has contributed to investor uncertainty. The index’s position below its 21-period Simple Moving Average (SMA) continues to signal a bearish trend, adding to the negative sentiment in the market. Looking ahead, traders are closely monitoring the 25,000 level as a critical support zone. If the index manages to hold above this threshold, there may be potential for a recovery. However, a move below the 25,000 mark would heighten concerns of further declines. Key support levels to watch include 23,800 and 23,600. A breach of 23,800 could indicate a deeper correction, with further selling pressure potentially testing the lower support levels. Market participants will be paying close attention to the price action around these levels to assess whether the recent pullback is a temporary pause or the onset of a more significant downtrend.