Canadian stocks gained modestly on Friday

Image Source : Krish Capital Pty Ltd

Index Update: Canadian stocks gained modestly on Friday, with strong earnings from banking stocks over the week generating buying interest along with the release of domestic economic data that has triggered rate cut expectations. After opening just below yesterday's close, the benchmark S&P/TSX Composite Index rallied to an intraday high of 28,607.30 past noon and finally settled at 28,564.45, up by 129.65 points (or 0.46%)

Macro Update: Indicating the squeezing effects of US tariffs on Canadian exports, data released by Statistics Canada today revealed that Canadian GDP contracted by 1.6% on a seasonally adjusted, annualized rate in the second quarter 2025, with GDP declining by 0.4% from the first quarter. Real GDP edged down 0.1% month-on-month in July. The Bank of Canada has kept rates steady at 2.75% at its last three meetings since March. Household spending jumped by 4.5% on an annualized basis. Gains were observed for durables, semi-durables, and services. Export of goods dropped 7.5%, led by a 24.7% plunge in passenger cars and trucks. Industrial machinery exports fell by 18.5%. Travel slid 11.1%.

Top Movers:  Among the individual stocks, Endeavor Silver Corp (6.19%), Seabridge Gold Inc (5.64%), Equinox Gold Corp (5.63%), and Bausch Health Companies Inc (3.36%) were the prominent gainers.

Our Stance: Currently, the index is testing key support near 28,300. Sustaining this level will be critical to maintaining the ongoing uptrend, while a breakdown could open the door to a pullback toward 28,000 and 27,800. On the upside, holding these support zones above will be essential for preserving momentum and paving the way for further gains in the sessions ahead.

Commodity Update: The dollar weakened as traders reacted to President Trump’s escalating attacks on the Federal Reserve, including the dismissal of Governor Lisa Cook, stoking fears of eroded central bank independence. Gold up 0.56% at $3,565.65 and silver surging 2.44% to $41.715, while copper rose 0.36% to $9,927.15. Brent crude gained 0.45% to $68.46, with oil steady as markets balanced OPEC+ output growth against Russia-Ukraine supply risks.

Technical Update:

On Friday, the S&P/TSX Composite Index gained 129.65 points, or 0.46%, to close at 28,564.45, supported by strong trading volumes. The healthcare sector led the advance with a 2.49% rise. From a technical perspective, the index remains comfortably above its 21-period Simple Moving Average (SMA), reinforcing a constructive short-term outlook. The Relative Strength Index (RSI) at 66.18 reflects solid bullish momentum. Currently, the index is testing key support near 28,300. Sustaining this level will be critical to maintaining the ongoing uptrend, while a breakdown could open the door to a pullback toward 28,000 and 27,800. On the upside, holding these support zones above will be essential for preserving momentum and paving the way for further gains in the sessions ahead.