Canadian stocks closed lower on Friday

Index Update:  The benchmark S&P/TSX Composite Index fell as much as 1.1 percent before eventually closing down 133.34 points or 0.4 percent at 31,527.39. The index had reached a record intraday high in early trading.

Macro Update:  On the economic front, Statistics Canada released a report showing the total value of building permits issued in Canada soared by 14.9 percent to C$13.8 billion in October, led by the residential sector. Separate reports showed sales by Canadian wholesalers inched up by 0.1 percent in October, while Canadian industrial capacity utilization rose to 78.5 percent in the third quarter from 77.6 percent in the second quarter.

Top Movers:  Canadian tech stocks followed their U.S. peers lower, resulting in a 3.4 percent plunge by the S&P/TSX Capped Information Technology Index, although the index closed well off its lows. On the other hand, healthcare stocks skyrocketed, resulting in an 8.9 percent spike by the S&P/TSX Capped Health Care Index

Our Stance:  Momentum indicators remain supportive, with the RSI at 61.94, indicating sustained strength and keeping the trend within the neutral-to-positive territory. On the downside, the 31,400 level serves as the immediate support zone. A decisive breach below this level could invite further corrective pressure toward 31,200, with the next key support placed near 31,000.

Commodity Update:  The U.S. dollar remained under pressure on Monday, while the euro and sterling traded steady ahead of key central bank meetings this week. Focus stayed on interest rate outlooks as the new year approaches. Gold rose 0.72% to USD 4,358.20, silver gained 1.34% to USD 62.83, and copper increased 0.70% to USD 11,653.20. Brent crude added 0.50% to USD 61.44, though oversupply and weak demand concerns persisted.

Technical Update:

The S&P/TSX Composite Index declined 133.34 points (−0.42%) on Friday to close at 31,527.39, as short-term profit-taking limited recent upside momentum. Despite this modest pullback, the broader technical outlook remains constructive. The index continues to hold comfortably above its 21-period Simple Moving Average (SMA), a crucial short-term trend support, reinforcing the prevailing bullish bias. Momentum indicators remain supportive, with the RSI at 61.94, indicating sustained strength and keeping the trend within the neutral-to-positive territory. On the downside, the 31,400 level serves as the immediate support zone. A decisive breach below this level could invite further corrective pressure toward 31,200, with the next key support placed near 31,000.