Canadian Stocks Move Higher

Source: Krish Capital Pty Ltd

Index Update:

After opening higher than yesterday's close, the benchmark S&P/TSX Composite Index moved up to reach an intraday high of 29,218.25 within an hour. The index subsequently gave background but managed to remain in positive territory but ending the day at a new record closing high of 29,179.39, up by 116.38 points (or 0.40%).

Macro Update:

Days before, Canadian Prime Minister Mark Carney announced $80-million tariff-relief funding for small and medium-sized businesses in Atlantic Canada as part of a larger $1-billion fund to help businesses hit by American tariffs that came into effect August 1.

In an effort to strengthen the domestic economy, the government has already framed Bill C-5 legislation intended to speed up approval of major projects.

In the US, inflation data for August revealed that that the producer prices fell 0.1% month-on-month and growth slowed to 2.6% year-on-year.

Month-on-month core producer prices (excluding food and energy) fell by 0.1%, while year-on-year growth slowed to 2.8% in August.

Top Movers:

Among the individual stocks, Baytex Energy Corp (6.47%), Tamarack Valley Energy Ltd (5.48%), Cenovus Energy Inc (4.92%), Iamgold Corp (9.09%), and Equinox Gold Corp (8.20%) were the prominent gainers.

Our Stance:

Momentum remains firm, with the Relative Strength Index (RSI) at 80.58, indicating strong upside potential despite being in overbought territory. The index is currently testing support around 28,900. Sustaining above this zone will be crucial to preserve the prevailing uptrend, while a breakdown could open the door for a pullback toward 28,700 and 28,500 on the daily chart.

Commodity Update:

The dollar steadied in early Asian trade Thursday after a surprise drop in U.S. factory-gate prices strengthened expectations of a Fed rate cut next week, with focus on U.S. CPI data later. Commodities saw mixed moves: gold slipped 0.19% to $3,675.10, copper eased 0.22% to $9,989.65, while silver gained 0.40% to $41.76. Brent crude edged up 0.10% to $67.50 as oversupply and weak U.S. demand capped geopolitical risks.

Technical Update:

On Wednesday, the S&P/TSX Composite Index climbed 116.38 points, or 0.40%, to close at 29,179.39, supported by strong trading volumes that reinforced investor confidence. The basic materials sector led the advance with a 1.55% gain, reflecting renewed optimism in the space. Technically, the index maintains a bullish structure, holding comfortably above its 21-period Simple Moving Average (SMA). Momentum remains firm, with the Relative Strength Index (RSI) at 80.58, indicating strong upside potential despite being in overbought territory. The index is currently testing support around 28,900. Sustaining above this zone will be crucial to preserve the prevailing uptrend, while a breakdown could open the door for a pullback toward 28,700 and 28,500 on the daily chart.