Canadian Stocks Edges Higher

Index Update:  Canadian stocks inched higher on Friday as investors assessed U.S. efforts to end the ongoing gulf war against Iran. Surges in gold and oil prices led to gains in the materials and energy sectors, respectively, offsetting weakness in other sectors. The benchmark  S&P/TSX Composite Index lost the momentum gained earlier in the session and turned lower but gained ground to settle at 31,960.65, up by 73.13 points (or 0.23%).

Macro Update:  The Bank of Canada conceded that it faces "a tough job" navigating structural shifts that will permanently reshape the country's economic landscape. Senior Deputy Governor Carolyn Rogers warned that the next five years could prove as turbulent as the last. Canada also faces another challenge of renewing the Canada-United States-Mexico trade deal with the U.S. smoothly. The deal offers an economically viable safe route for Canadian exports to the U.S. However, concerns of the U.S. walking out of the agreement and its enormous burden on Canadian economy is now drawing investors' attention. CUSMA negotiations between Canada and the U.S. are yet to gather pace.

Top Movers:  Among the individual stocks, Methanex Corp (9.96%), Ssr Mining Inc (7.41%), First Majestic Silver Corp (7.21%), Strathcona Resources Ltd (8.85%), Athabasca Oil Corp (7.87%), and Vermilion Energy Inc (5.00%) were the prominent gainers.

Our Stance:  Momentum indicators also remain subdued, with the 14-period Relative Strength Index (RSI) around 41.62, indicating mild negative momentum. On the downside, immediate support is seen near 31,800; a break below this level could extend consolidation toward the 31,500 zone in the near term.

Commodity Update:  The U.S. dollar remained firm, heading for its strongest monthly gain since July amid escalating Middle East tensions and yen weakness beyond the 160 level. Safe-haven demand supported metals, with Gold rose 0.26% to USD 4,536.15, silver gained 0.60% to USD 70.215, and copper increased 0.57% to USD 12,209.00. Energy markets strengthened as Brent crude Up 1.95% to USD 107.37, driven by geopolitical risks and supply disruption concerns.

Technical Update:

On Friday, the S&P/TSX Composite Index gained 73.13 points (0.23%) to close at 31,960.65. Despite the recent pullback, the broader market structure continues to suggest a phase of healthy consolidation rather than a definitive trend reversal. From a technical perspective, the index remains below its 50-period Simple Moving Average (SMA) on the daily chart, which is acting as a dynamic resistance and signaling a cautious near-term outlook. Momentum indicators also remain subdued, with the 14-period Relative Strength Index (RSI) around 41.62, indicating mild negative momentum. On the downside, immediate support is seen near 31,800; a break below this level could extend consolidation toward the 31,500 zone in the near term.