Canadian stocks slumped on Friday

Image Source : Krish Capital Pty Ltd

Index Update:  After opening lower than yesterday's close, the benchmark S&P/TSX Composite Index fell immediately. Failing to rebound, it travelled in negative territory before finally closing at 27,020.43, down by 239.35 points (or 0.88%).

Macro Update:  Despite Canadian officials engaging in trade talks with the US for more than a month, last Friday, Trump expressed his disenchantment with the progress of talks and stated that Canada would face the tariffs instead of negotiations. The Canadian team is still in Washington working on a deal.  S&P Global data released today revealed that the Canada Manufacturing PMI rose to 46.1 in July from 45.6 of June but continued to reflect a contraction in the Canadian private-sector factory activity.

Top Movers:  Among the individual stocks, Mda Ltd (18.38%), Dundee Precious Metals Inc (7.05%), and Capstone Mining Corp (5.15%) were among the prime market-moving stocks.

Our Stance:  The index is currently testing a crucial support zone near 26,800. Holding above this level is critical to sustaining the upward trajectory. A decisive break below could prompt a deeper pullback, with additional support expected between 26,500 and 26,300. Maintaining these levels will be essential to preserving the near-term bullish outlook.

Commodity Update:  The U.S. dollar fluctuated on Tuesday amid growing expectations of Federal Reserve rate cuts following the release of a weak U.S. jobs report. Investor sentiment was further pressured by concerns over the broader economic impact of recently imposed U.S. tariffs. Gold edged up 0.08% to $3,429.10, silver rose 0.35%, copper added 0.12%, while Brent crude slipped 0.10% to $68.72, stabilising after recent losses driven by increasing supply and demand concerns.

Technical Update:

The S&P/TSX Composite Index fell 239.35 points on Thursday to close at 27,020.43, marking a 0.88% decline. The technology sector led the losses, dropping 2.26% during the session. Despite the setback, the index remains technically resilient, continuing to trade above its 50-period Simple Moving Average (SMA) a key indicator supporting the broader bullish trend. The Relative Strength Index (RSI) sits at 47.28, reflecting neutral-to-positive momentum. The index is currently testing a crucial support zone near 26,800. Holding above this level is critical to sustaining the upward trajectory. A decisive break below could prompt a deeper pullback, with additional support expected between 26,500 and 26,300. Maintaining these levels will be essential to preserving the near-term bullish outlook.