TSX Sheds 1.1% on Thursday

Image Source : Krish Capital Pty Ltd

Index Update: The Canadian market closed notably lower on Thursday amid uncertainty about the Trump administration's moves with regard to tariffs and economic policies. The benchmark S&P/TSX Composite Index ended down 286.78 points or 1.15% at 24,584.04, more than 100 points off the day's low of 24,476.47.

Macro Update: The 25% tariffs by U.S. on Canadian goods and 10% on Canadian energy products came into force earlier this week. The Trump administration decided to delay the levy on auto companies for a month. The Canadian government, for its part, announced reciprocal tariffs on over $150 billion of US imports.

On the economic the Canadian trade surplus widened to CAD 4.0 billion in January 2025, the largest since May 2022. Canada's merchandise exports rose 5.5% to a record CAD 74.5 billion, while imports increased 2.3%, marking the fourth consecutive monthly rise for both.

Productivity in Canada increased to 102.37 points in the fourth quarter of 2024 from 101.78 points in the third quarter of 2024, as per data from Statistics Canada.

Top Movers: Parkland Corporation, Badger Infrastructure, Rogers Communications, Telesat Corporation, Seabridge, Alimentation Couche-Tard, Wajax Corporation, Stella-Jones, MEG Energy, BCE, Cenovus Energy, Nutrien, Ag Growth International and BRP Inc., gained 2 to 6%.

Our Stance: The index remains below its 21-period Simple Moving Average (SMA), reinforcing the broader downtrend and signaling continued selling pressure. The key support level to watch is 24,300, aligning with a significant horizontal trendline. Holding above this level may provide a base for stabilization and potential recovery. However, a break below could intensify losses, with further downside targets at 24,100 and 24,000.

Commodity Update: The U.S. dollar remained near a four-month low on Friday, pressured by ongoing tariff uncertainties and concerns about economic growth. Investors awaited key jobs data, with the outlook clouded by U.S. tariffs on Mexico and Canada. Despite a tariff reprieve from President Trump, the yen held near its strongest level against the dollar since October. In the commodities market, gold dropped 0.37% to $2,915.30, silver fell 0.24% to $33.24, and copper gained 0.26% to $9,683.10. Brent crude declined 0.19% to $69.59, and it has been on track for its largest weekly drop since October due to rising production and demand concerns.

Technical Update: On Thursday, the S&P/TSX Composite Index dropped 286.78 points (1.15%), closing at 24,584.04. The decline was largely driven by weakness in the technology sector, which fell 3.26%, contributing to the overall bearish sentiment. The index remains below its 21-period Simple Moving Average (SMA), reinforcing the broader downtrend and signaling continued selling pressure. Momentum indicators suggest caution, with the Relative Strength Index (RSI) at 38.11, approaching oversold territory. While this could trigger a short-term bounce, downside risks persist. The key support level to watch is 24,300, aligning with a significant horizontal trendline. Holding above this level may provide a base for stabilization and potential recovery. However, a break below could intensify losses, with further downside targets at 24,100 and 24,000. Market sentiment remains fragile, with investors closely monitoring macroeconomic trends and sector performance for direction.