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TSX Settles Moderately Lower

By: Team Kalkine | Jan 28, 2025 | Read Time : 10 Mins
TSX Settles Moderately Lower

Image Source : Krish Capital Pty Ltd

Index Update: The benchmark S&P/TSX Composite Index, which opened with a big negative gap at 25,347.93 and slid to 25,204.06 subsequently, ended the session with a loss of 179.34 points or 0.7% at 25,289.15.

Macro Update: In economic news, wholesale sales in Canada increased by 0.1% month-over-month in December after a 0.2% decline in November, according to preliminary estimates.

Investors are awaiting monetary policy announcements from the Bank of Canada, the Federal Reserve and the European Central Bank this week.

Top Movers: Telus Corp (T.TO), BCE Inc (BCE.TO), Riocan REIT (REI.UN.TO), Colliers International (CIGI.TO), TFI International (TFII.TO) and GFL Environmental (GFL.TO) moved higher, gaining 1.3 to 4%.

Our Stance: Traders should remain cautious and watch for any signs of a shift in market dynamics. The immediate support level sits at 24,900; if the index can hold above this level, it could signal that the pullback is temporary and pave the way for a potential rebound. A breach of this support, however, would raise the risk of a deeper correction, with the next key support zones at 24,600 and 24,400.

Commodity Update: The Japanese yen lost some safe-haven gains as investors reacted to the potential impact of China's DeepSeek, an open-source AI model using cost-effective chips and data. The euro weakened amid fresh tariff threats, while the U.S. dollar stabilized after a sharp drop due to market turbulence. In commodities, gold rose by 0.17% to $2,770.90, silver held steady at $30.45, and copper fell by 0.47% to $9,052.00. Brent crude saw a slight increase of 0.20%, reaching $77.20 per barrel, despite weak Chinese economic data and softer global demand outlooks. Markets are also awaiting the Fed's interest rate and GDP updates this week.

A graph of stock market

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Technical Update: The S&P/TSX Composite Index closed at 25,289.15 on Monday, reflecting a 0.70% decline, primarily driven by a 1.82% drop in the energy sector. This sector weakness weighed on the broader market sentiment, causing investors to reassess their positions. Despite the pullback, the index remains well above its 21-period Simple Moving Average (SMA), indicating that the short-term uptrend is still intact. However, the Relative Strength Index (RSI) has climbed to a relatively elevated level of 56.79, which could signal that momentum is starting to lose steam. While this does not necessarily point to an immediate reversal, traders should remain cautious and watch for any signs of a shift in market dynamics. The immediate support level sits at 24,900; if the index can hold above this level, it could signal that the pullback is temporary and pave the way for a potential rebound. A breach of this support, however, would raise the risk of a deeper correction, with the next key support zones at 24,600 and 24,400. Market participants are likely to remain in a cautious stance, balancing optimism from the still-positive short-term trend with the growing concerns around momentum softening.


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