Canadian stocks posted modest gains on Monday

Index Update:

Canadian stocks posted modest gains on Monday, recovering some losses from the previous three sessions as investors assessed developments in U.S.-Iran peace discussions and mixed reports regarding the potential reopening of the Strait of Hormuz.

After opening almost exactly at the previous week's close, today the benchmark the benchmark S&P/TSX Composite Index traded firmly positive throughout the session before settling at 35,002.18, up by 144.84 points (or 0.42%).

Macro Update:

On the domestic front, according to Statistics Canada, the Consumer Price Index increased 1.00% percent in May over the previous month and rose to 3.20% year on year.

On a month-on-month basis, core consumer prices in Canada increased 0.60% in May, and on a year-on-year basis, it edged up to 2.20%.

As of now, there is no breakthrough news on Canada-U.S. talks on the tripartite Canada-United States-Mexico Agreement on free trade.

Top Movers:

Among the individual stocks, Alamas Gold Inc (7.87%), Transcontinental Inc (7.66%), Atkinsrealis Group Inc (6.11%), Dpm Metals Inc (4.85%%), Wheaton Precious Metals Corp (4.67%), and Enerflex Ltd (4.22%) were the prominent gainers.

Our Stance:

. On the upside, attention remains focused on the key resistance area around 35,250. A decisive breakout above this level could reinforce bullish sentiment, attract fresh buying interest, and pave the way for a move toward the psychologically important 35,650 mark in the near term.

Commodity Update:

The U.S. dollar surged to an over one-year high on Tuesday as growing expectations of a hawkish Federal Reserve outweighed easing geopolitical concerns and lower oil prices. Sterling remained in focus following developments surrounding British Prime Minister Keir Starmer’s resignation. Gold fell 1.02% to USD 4,159.20, while silver declined 3.51% to USD 63.29 and copper slipped 0.61% to USD 13,571.20. Brent crude oil gained 0.38% to USD 78.15 after the previous session’s sharp decline, as investors monitored U.S.-Iran peace talks and awaited clearer signals on crude flows through the Strait of Hormuz.

Technical Update:

The S&P/TSX Composite Index advanced 144.84 points, or 0.42%, on Monday to close at 35,002.18, extending its recent rally and reflecting improving investor confidence. From a technical standpoint, the index continues to trade comfortably above its 21-day Simple Moving Average (SMA), which remains a key dynamic support level and reinforces the broader bullish trend. Momentum indicators also remain supportive, with the 14-day Relative Strength Index (RSI) hovering around 55.52. This reading suggests healthy buying interest while indicating that the market still has room to advance before approaching overbought territory. Immediate support is located near the 34,850 level. As long as the index holds above this zone, the current positive momentum and constructive technical structure are likely to remain intact. On the upside, attention remains focused on the key resistance area around 35,250. A decisive breakout above this level could reinforce bullish sentiment, attract fresh buying interest, and pave the way for a move toward the psychologically important 35,650 mark in the near term.