Canadian stocks posted sharp gains on Monday

Index Update: After opening well-above the previous week's close, the benchmark S&P/TSX Composite Index hit an intraday high of 30,439.06 within a few minutes and then traded firmly positive throughout the session to finally close at 30,416.44, up by 307.96 points (or 1.02%).

Macro Update: According to a business outlook survey conducted by Bank of Canada, more firms are now preparing themselves against a possible recession and hence hesitant to invest in hiring or growth. Around two-thirds are expecting a downturn in the next 12 months.

Data released by Statistics Canada today revealed that industrial product prices rose 0.8% month-on-month industrial in September (the fourth consecutive monthly increase). Year-on-year, prices increased 4%, led primarily by a 44.3% surge in prices for unwrought gold, silver, and platinum group metals, and their alloys.

The Consumer Price Index report for September to be released tomorrow may shed more light on inflation.

Top Movers: Among the individual stocks, Curaleaf Holdings Inc (4.48%), Ngex Minerals Ltd (12.71%), Perpetua Resources Corp (7.96%), Lundin Gold Inc (7.62%), Skeena Resources Ltd (7.12%), Discovery Silver Corp (6.74%), and Badger Infrastructure Solutions Ltd (3.64%) were the prominent gainers.

Our Stance: The index is currently consolidating near a key support zone around 30,200. Sustaining levels above this threshold will be crucial to preserving market confidence and maintaining the broader upward bias. Conversely, a decisive drop below this area could indicate waning bullish momentum, opening the door for a potential retracement toward 30,000 and 29,800.

Commodity Update: The dollar strengthened slightly against the yen on Tuesday as investors turned attention to political developments in Japan and the euro area, while U.S. credit risk worries persisted. Gold slipped 0.14% to USD 4,353.35 per ounce, silver declined 1.47% to USD 50.62, and copper rose 0.17% to USD 10,708.75. Brent crude dipped 0.10% to USD 61.00 per barrel, hovering near five-month lows amid supply glut and weak demand concerns.

Technical Update:

On Monday, the S&P/TSX Composite Index climbed 307.96 points, or 1.02%, to close at 30,416.44. The solid advance was supported by strong trading volumes, reflecting sustained investor confidence and reinforcing the ongoing bullish trend. Technically, the index remains in a firm uptrend, holding well above its 21-period Simple Moving Average (SMA), which continues to act as dynamic support. Momentum indicators also paint a constructive picture, with the 14-period RSI at 59.60, highlighting persistent buying strength. The index is currently consolidating near a key support zone around 30,200. Sustaining levels above this threshold will be crucial to preserving market confidence and maintaining the broader upward bias. Conversely, a decisive drop below this area could indicate waning bullish momentum, opening the door for a potential retracement toward 30,000 and 29,800.