TSX Ends Nearly 1% Down

Image Source : Krish Capital Pty Ltd

Index Update: The Canadian market closed significantly lower on Thursday, as equities plummeted on continued selling pressure due to weak commodity prices and rising concerns about US President-elect Donald Trump's tariff threats. The benchmark S&P/TSX Composite Index ended with a loss of 246.99 points or 0.96% at 25,410.71, a more than two week low.

Macro Update: Data from Statistics Canada said the total value of building permits in Canada fell 3.1% month-over-month to $12.61 billion in October, retreating from an 11.5% increase in the previous month.

Top Movers: Transcontinental Inc. (TCL.B.TO) rallied 4.4%. Bausch + Lomb Corporation (BLCO.TO), Bombardier Inc (BBD.B.TO), Hut 8 Corp (HUT.TO), Transcontinental (TCL.A.TO), Senvest Capital (SEC.TO), Descartes Systems Group (DSG.TO), Celestica Inc (CLS.TO), Great-West Lifeco (GWO.TO) and Loblaw Companies (L.TO) gained 1 to 3.5%.

Our Stance: Key technical levels are now in focus as the market navigates this uncertainty. The immediate support for the index is at 25,200, a level that could act as a buffer against further declines. If the index manages to hold above this level, a potential rebound could materialize, especially if there is stabilization in sectors like energy. However, a break below 25,200 could open the door for a deeper pullback, with support zones identified at 25,000 and 24,900. These levels will be critical for traders looking to assess the health of the market and the likelihood of a continuation or reversal of the current trend.

Commodity Update: The dollar rose to a 2.5-week high on Friday, set for its best week in a month, amid expectations the Federal Reserve will cut interest rates next week but take a patient approach to further reductions. Soft U.S. producer price data, despite a high headline figure, reinforced bets for a rate cut on December 18, while rising unemployment claims indicated a cooling job market. In commodities, gold fell 0.02% to $2,708.80, silver dropped 0.42% to $31.42, and copper gained 0.12% to $9,096.50. Oil prices were subdued, with Brent crude edging down 0.01% to $73.34 per barrel, driven by expectations of a supply surplus in 2025. However, losses were capped by optimism surrounding fresh stimulus measures from China to boost its sluggish economy.

Technical Update: On Thursday, the S&P/TSX Composite Index closed at 25,410.71, marking a 0.96% decline for the day. This drop was largely driven by weakness in the energy sector, which fell 1.74%, and contributed significantly to the broader market pullback. Despite this, the index remains above its 50-period Simple Moving Average (SMA), signaling that the short-term uptrend is still in place. However, there are signs that momentum may be slowing. The Relative Strength Index (RSI) dropped to 55.33, which indicates that bullish momentum is losing steam. Key technical levels are now in focus as the market navigates this uncertainty. The immediate support for the index is at 25,200, a level that could act as a buffer against further declines. If the index manages to hold above this level, a potential rebound could materialize, especially if there is stabilization in sectors like energy. However, a break below 25,200 could open the door for a deeper pullback, with support zones identified at 25,000 and 24,900. These levels will be critical for traders looking to assess the health of the market and the likelihood of a continuation or reversal of the current trend.