Canadian Stocks Rebound Sharply but Ended Largely in Negative Territory

Index Update:  The benchmark S&P/TSX Composite Index tumbled by as much as 1.6 percent in early trading before climbing well off its worst levels and closed down 177.16 points or 0.5 percent at 32,896.55.

Macro Update:  On the economic front, Statistics Canada released a report showing its consumer price index inched up by 0.1 percent in January on a seasonally adjusted monthly basis. The report also said the annual rate of growth by consumer prices slowed to 2.3 percent in January from 2.4 percent in December. Statistics Canada said gasoline prices were the largest contributor to deceleration in headline inflation. Excluding gasoline, consumer prices jumped 3.0 percent in January, matching the increase in December.

Top Movers:  Banks helped limit the downside as TD gained 0.4% and Scotiabank added 0.8% after January inflation slowed to 2.3%, reinforcing expectations that the Bank of Canada could begin easing later this year.

Our Stance:  Momentum indicators present a mixed picture, with the Relative Strength Index (RSI) at 53.24, reflecting fading strength and keeping the trend in neutral-to-bearish territory. On the downside, immediate support is seen at 31,400. A decisive break below this level could intensify corrective pressure toward 32,100, with the next major support zone positioned around 32,000, where buying interest may re-emerge.

Commodity Update:   The U.S. dollar steadied on Wednesday as geopolitical concerns kept investors cautious ahead of the Federal Reserve meeting minutes, which may offer clarity on the timing of future rate adjustments. Precious and base metals advanced, with gold rising 0.54% to USD 4,933.10, silver up 0.68% to USD 74.04, and copper gaining 0.75% to USD 12,687.40. Brent crude edged 0.04% lower to USD 67.39 amid easing supply concerns.

Technical Update:

The S&P/TSX Composite Index declined sharply on Tuesday, shedding 177.16 points (−0.54%) to close at 32,896.55, as short-term profit-taking disrupted the recent upward momentum. From a technical perspective, the index continues to trade below its 21-period Simple Moving Average (SMA), which is acting as an immediate resistance and limiting recovery attempts. Momentum indicators present a mixed picture, with the Relative Strength Index (RSI) at 53.24, reflecting fading strength and keeping the trend in neutral-to-bearish territory. On the downside, immediate support is seen at 31,400. A decisive break below this level could intensify corrective pressure toward 32,100, with the next major support zone positioned around 32,000, where buying interest may re-emerge.