Canadian Stocks Pull Back Sharply

Image Source : Krish Capital Pty Ltd

Index Update: Canadian stocks moved sharply lower during trading on Thursday, giving back ground following the spike seen over the course of Wednesday's session. After soaring 1,220.13 points or 5.4 percent to 23,727.03 on Wednesday, the benchmark S&P/TSX Composite Index plunged 712.16 points or 3.0 percent to 23,014.87.

Macro Update: The U.S Labor Department report said the consumer price index edged down by 0.1 percent in March after rising by 0.2 percent in February. Economists had expected consumer prices to inch up by 0.1 percent.

Excluding food and energy prices, the core consumer price index crept up by 0.1 in March after rising by 0.2 percent in February. Core prices were expected to rise by 0.3 percent.

The report also said the annual rate of consumer price growth slowed to 2.4 in March from 2.8 percent in February. Economists had expected the pace of price growth to slow to 2.6 percent.

Top Losers: Worries over global growth drove benchmark oil futures to slump toward four-year lows, pressuring Canadian Natural, Suncor, Imperial Oil, and Cenovus to plunge between 6.7% and 8.4%. Tech and consumer discretionary were also pressured by the pessimistic momentum, driving e-commerce mega-cap Shopify to sink 8.4%.

Our Stance: The overall trend remains cautious. Immediate support is seen at 22,700, a key horizontal level that could provide a near-term floor and spark consolidation or a technical bounce. However, a clear break below this level would likely open the door to a further downside, with the next support levels at 22,400 and 22,000.

Commodity Update: The U.S. dollar weakened on Friday as declining confidence in the U.S. economy drove investors toward safe-haven assets like the Swiss franc, yen, euro, and gold. Gold hit a record high, rising 1.92% to $3,238.40, while silver gained 1.37% to $31.18, and copper rose 0.49% to $8,949.20. Brent crude fell 0.50% to $63.02 amid concerns over the prolonged U.S.-China trade war impacting global demand.

Technical Update: On Thursday, the S&P/TSX Composite Index plunged 712.16 points (-3.00%) to close at 23,014.87, driven largely by a sharp 9.04% decline in the healthcare sector, which weighed heavily on the broader market. This sector-led weakness deepened bearish sentiment, pushing the index further below its 21-period Simple Moving Average (SMA), a signal of ongoing downward momentum and sustained selling pressure. The Relative Strength Index (RSI) has fallen to 37.07, nearing oversold territory and suggesting the potential for a short-term relief rally. Despite this, the overall trend remains cautious. Immediate support is seen at 22,700, a key horizontal level that could provide a near-term floor and spark consolidation or a technical bounce. However, a clear break below this level would likely open the door to a further downside, with the next support levels at 22,400 and 22,000.