TSX Surges to Three-Week High as Election Optimism Fuels Gains

Image Source : Krish Capital Pty Ltd

Index Update:

The S&P/TSX Composite Index showed an upside of 0.31% to 24,874.48 on Tuesday, reaching its highest level over the three weeks. This upward momentum reflected investors’ favorable reaction to Liberty Party’s minority win. Market confidence was notably bolstered by Carney’s commitment to push back firmly against U.S. import duties, even in the absence of a parliamentary majority.

Macro Update:

Canadian 10-year yields have surpassed 3.18% influenced by Liberal’s fiscal outlook and Bank of Canada’s conservative stance. The central bank decided to retain 2.75% policy rate, due to sustained core inflation and the dual risks of U.S. recession or stagnation.

The Canadian dollar traded near a six-month zenith at the 1.38 per USD level benefited from a sustained flight from USD assets as G10 currencies continued to be supported by a flight away from US dollar assets.

The attention remained on US - China trade negotiations and the Federal Reserve’s policy direction, both are the key influences on financial conditions and industry trends in Canada’s uncertain trade landscape with Auto Industry waiting for potential tariff relief from Washington.

Top Movers and Losers:

The biggest gainers of the session on the S&P/TSX Composite were Brookfield Business Partners LP (TSX: BBU_u), which rose 3.86%, Tilray Inc (TSX: TLRY) added 3.08%, and TMX Group Limited (TSX: X) was up 2.87%. Biggest losers included Kelt Exploration Ltd. (TSX: KEL), which fell 3.67%, International Petroleum Corp (TSX: IPCO) declined 3.64% and Birchcliff Energy Ltd. (TSX: BIR) down 3.47%.

Our Stance:

The index remains firmly in a bullish trajectory, as it trades above its 21-period Simple Moving Average (SMA). The Relative Strength Index (RSI) is at 56.99, indicating moderate strength without being overbought. Currently, the index is testing a critical support level near 24,500. Maintaining this level is essential to preserve upward momentum.

Commodity Update:

The U.S. dollar held steady Wednesday but faced its worst monthly performance since November 2022 amid volatile trade policies under Trump, lifting the euro, yen, and Swiss franc. The Fed is expected to delay rate cuts until labor market weakness emerges and then ease aggressively. Gold fell 0.50% to $3,318.60, silver dropped 1.17%, copper dipped 0.25%, and Brent crude slipped 0.10% on global growth and trade concerns.

Technical Update:

On Tuesday, the S&P/TSX Composite Index posted a modest gain of 75.09 points, closing at 24,874.48, an increase of 0.31%. The uptick was supported by strong trading volumes, signaling sustained investor confidence and engagement. A key driver of the day’s performance was the healthcare sector, which advanced by 1.50%, reflecting growing optimism in that segment. From a technical analysis standpoint, the index continues to exhibit a bullish trend, as it trades above its 21-period Simple Moving Average (SMA). The Relative Strength Index (RSI) is at 56.99, indicating moderate strength without being overbought. Currently, the index is testing a critical support level near 24,500. Maintaining this level is essential to preserve upward momentum. A drop below 24,500 could trigger a retracement, with the next key support zone between 24,200 and 24,000, as identified on the daily chart.