Canadian Stocks End Roughly Flat

Image Source : Krish Capital Pty Ltd

Index Update:  Canada's benchmark S&P/TSX Composite Index opened at a fresh record intraday high of 28,530.19. However, failing to hold there, the index turned lower and travelled in negative territory for most of the day before finally closing at 28,434.80, up by just 1.80 points (or 0.01%).

Macro Update:  Data released by Statistics Canada revealed that Canada recorded a Current Account Deficit of C$21,200 million in the second quarter 2025. On the monetary front in the US, after the Fed Chair Jerome Powell indicated space for a rate cut in his speech at the recent Jackson Hole symposium, traders are convinced a lower rate is coming after the upcoming September 17 Fed meeting. In Canada, with the current unemployment rate at 6.9% as of July and consumer inflation declined to around 1.7% year-over-year, markets are now fully pricing additional rate cuts from Canada's central bank. From around 5% in mid-2024, three times in a row, Bank of Canada's governing council has been keeping the policy interest rate steady at 2.75%.

Top Movers:  Among the individual stocks, Celestica Inc Sv (4.93%), Cameco Corp (4.34%), Lightspeed Commerce Inc (1.60%), and Transalta Corp (4.21%) were the prominent gainers.

Our Stance:  Currently, the index is testing key support near 28,200. Sustaining this level will be crucial to preserving the prevailing bullish trend. A breakdown, however, could open the way for a pullback toward the next support zones at 28,000 and 27,800. On the upside, holding above support levels will be essential to maintain momentum, with scope for the index to challenge higher resistance zones in the sessions ahead.

Commodity Update:  The dollar weakened Friday, on track for a 2% August decline amid rising bets of a Federal Reserve rate cut and concerns over its independence, with President Trump attempting to oust Fed Governor Lisa Cook, who has filed a lawsuit. Gold slipped 0.06% to $3,472.20, silver fell 0.23% to $39.10, while copper gained 0.22% to $9,847.75. Brent crude dropped 0.71% to $67.50, with oil prices set for a weekly rise despite U.S. demand slowdown and Russian supply uncertainty.

Technical Update:

On Thursday, the S&P/TSX Composite Index advanced 1.80 points, or 0.01%, to close at 28,434.80. Gains were supported by strong trading volumes, with the basic materials sector leading performance, up 1.51%. From a technical perspective, the index remains firmly above its 21-period Simple Moving Average (SMA), underscoring a positive short-term outlook. The Relative Strength Index (RSI) at 69.96 reflects strong momentum, edging close to overbought territory. Currently, the index is testing key support near 28,200. Sustaining this level will be crucial to preserving the prevailing bullish trend. A breakdown, however, could open the way for a pullback toward the next support zones at 28,000 and 27,800. On the upside, holding above support levels will be essential to maintain momentum, with scope for the index to challenge higher resistance zones in the sessions ahead.