Canadian stocks Closed Bit Higher

Source: Krish Capital Pty Ltd

Index Update:

Canadian stocks edged marginally higher on Tuesday, supported by strong gains by energy and material shares as investors are pricing in rate cuts by the Canadian central bank as well as the US Fed in the second week of September. Notably, gold hit a fresh peak today.

After opening just a little lower than yesterday's close, the benchmark S&P/TSX Composite Index was volatile throughout the session before finally close at 29,063.01, up by 35.28 points (or 0.12%).

Macro Update:

Disappointing jobs data in both the US and Canada has bolstered expectations that the central banks of both the nations will resort to monetary easing. Notably, the BoC has maintained its current benchmark rate at 2.75% since March.

Last week, Statistics Canada had reported that unemployment climbed to 7.1% in August, the highest level in four years, exceeding market expectations of 7%. While the number of unemployed increased to around 1.595 million, youth unemployment remained elevated at 14.5%.

Sunday's decision by the OPEC+ alliance to modestly increase oil output in October by 137,000 barrels per day, the increasing threat of US sanctions against Russian oil exports, and the news of an Israeli military attacking on a Hamas delegation in Qatar, sent up crude oil prices and supported energy stocks on the upside.

Top Movers:

Among the individual stocks, Headwater Exploration Inc (3.92%), Energy Fuels Inc (10.40%), Teck Resources Ltd (11.53%), Tamarack Valley Energy Ltd (3.40%), Imperial Oil (2.59%), and Ero Copper Corp (3.07%) were the prominent gainers.

Our Stance:

The index is testing a key support level around 28,800. Holding this zone would strengthen the case for continued upward momentum, while a decisive break below could expose the market to retracement risks, with further supports seen at 28,600 and 28,400. Sustaining price action above these levels will be pivotal to maintaining the current bullish sentiment and unlocking additional gains in the near term.

Commodity Update:

The U.S. dollar held firm on Wednesday ahead of key inflation data that could shape upcoming Federal Reserve rate decisions. In commodities, gold slipped 0.23% to $3,674.10, while silver rose 0.73% to $41.64 and copper inched up 0.06% to $9,934.20. Brent crude gained 0.70% at $66.92, supported by Middle East tensions after Israel struck Hamas targets in Qatar and reports of potential new U.S. sanctions on Russian oil buyers.

Technical Update:

On Tuesday, the S&P/TSX Composite Index posted modest but constructive gains, rising 35.28 points to close at 29,063.01, up 0.12%. The advance was supported by healthy trading volumes, reflecting sustained investor confidence. From a technical standpoint, the index remains on firm footing, trading comfortably above its 21-period Simple Moving Average (SMA), which reinforces the prevailing bullish trend. The Relative Strength Index (RSI) at 78.97 suggests there is still room for further upside before approaching overbought territory. The index is testing a key support level around 28,800. Holding this zone would strengthen the case for continued upward momentum, while a decisive break below could expose the market to retracement risks, with further supports seen at 28,600 and 28,400. Sustaining price action above these levels will be pivotal to maintaining the current bullish sentiment and unlocking additional gains in the near term.