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Image Souce: Krish Capital Pty Ltd
Index Update: The benchmark S&P/TSX Composite Index, which remained in negative territory right through the session, closed down 121.09 points or 0.47% at 25,504.33.
Macro Update: Investors looking ahead to the Bank of Canada's interest rate decision and U.S. consumer price inflation data, due on Wednesday. The Canadian central bank is widely expected to cut interest rate by 50 basis points.
Top Movers: SSR Mining (SSRM.TO) gained nearly 6%. Bausch + Lomb Corporation (BLCO.TO), TerraVest Industries (TVK.TO), Docebo Inc (DCBO.TO), Sprott Inc (SII.TO), Tecsys Inc (TCS.TO) and Dollarama Inc (DOL.TO) gained 1.5 to 3%.
Our Stance: As traders monitor the situation, key technical levels are in focus. Immediate support for the index is at 25,200. If the index can hold above this level, a potential rebound may be in the cards. However, a breach of this support could trigger a deeper pullback, with support zones identified at 25,000 and 24,900. Given these mixed signals from both the broader market and individual sectors, market participants may adopt a cautious stance moving forward, balancing optimism with the awareness of potential risk.
Commodity Update: The U.S. dollar reached a two-week high against the yen on Wednesday, driven by anticipation of U.S. inflation data that could signal the pace of future Federal Reserve interest rate cuts. In commodities, gold climbed 0.71% to $2,738 per ounce, silver rose 0.20% to $32.81 per ounce, and copper gained 0.64%, reaching $9,300 per ton. Brent crude increased by 0.40%, settling at $72.47 per barrel. The rise in oil prices came amid optimism over stimulus measures in China, the world's largest importer, while traders awaited further insights into the U.S. economy and oil inventories.
Technical Update: On Tuesday, the S&P/TSX Composite Index closed at 25,504.33, reflecting a modest decline of 0.47%. The healthcare sector experienced the most significant downturn, falling by 1.47%, which contributed to the broader market weakness. Despite this, the index remains above its 21-period Simple Moving Average (SMA), indicating that the short-term uptrend is still intact. However, the Relative Strength Index (RSI) has risen to 63.16, suggesting that the market could be nearing overbought conditions. This could signal a potential softening in momentum and may lead to cautious trading in the short term. As traders monitor the situation, key technical levels are in focus. Immediate support for the index is at 25,200. If the index can hold above this level, a potential rebound may be in the cards. However, a breach of this support could trigger a deeper pullback, with support zones identified at 25,000 and 24,900. Given these mixed signals from both the broader market and individual sectors, market participants may adopt a cautious stance moving forward, balancing optimism with the awareness of potential risk.