Canadian stocks closed incrementally lower on Thursday

Source: Krish Capital Pty Ltd

Index Update:

Canadian stocks closed incrementally lower on Thursday, as investors took to profit taking but refrained from making big moves. Upbeat US economic data partly offset recent optimism about further interest rate cuts.

After opening much lower than yesterday's close, the benchmark S&P/TSX Composite Index regained ground but still closed down 24.97 points (or 0.08%) at 29,731.98.

Macro Update:

On the Canadian economic front, data from Statistics Canada showed average weekly earnings rose 3.3% year-on-year to C$1,307.86 in July, easing slightly from 3.6% in June.

The yield on the 30-year-bond rose to 3.68%, marking a 0.01% increase from the previous session.

In the US, a report released by the Labor Department unexpectedly showed an extended pull-back by first-time claims for US unemployment benefits for the week ending September 20.

Top Movers:

Among the individual stocks, Ssr Mining Inc (4.35%), Novagold Res Inc (3.83%), Endeavor Silver Corp (3.40%), Northland Power Inc (1.72%), and Magna International Inc (1.50%) were the prominent gainers.

Our Stance:

This elevated reading underscores robust bullish momentum but also places the index in overbought territory, raising the risk of short-term consolidation or corrective pullbacks. On the downside, immediate support lies at 29,500, a critical level for bulls to defend. A decisive break below this base could open the door to deeper retracements toward 29,300 and 29,100.

Commodity Update:

The dollar held firm Friday after upbeat U.S. data reduced expectations of further Fed easing this year. Gold slipped 0.02% to $3,770.50, while silver eased 0.19% to $45.03. Copper gained 0.17% to $10,281.05. Brent crude rose 0.20% to $69.57, set for its sharpest weekly advance since early June, as Ukraine’s strikes on Russia’s energy assets prompted Moscow to curb fuel exports and signal potential crude output cuts.

Technical Update:

The S&P/TSX Composite Index closed Wednesday’s session with a modest decline of 24.97 points (−0.08%), settling at 29,731.98. The pullback reflected mild profit-taking, though the broader technical backdrop remains constructive. From a trend perspective, the index continues to trade comfortably above its 21-period Simple Moving Average (SMA), which is acting as dynamic support and reinforcing the prevailing short-term uptrend. Sustained closes above this level signal that buyers remain in control despite near-term fluctuations. Momentum indicators further highlight this strength, with the Relative Strength Index (RSI) at 72.25. This elevated reading underscores robust bullish momentum but also places the index in overbought territory, raising the risk of short-term consolidation or corrective pullbacks. On the downside, immediate support lies at 29,500, a critical level for bulls to defend. A decisive break below this base could open the door to deeper retracements toward 29,300 and 29,100.