Canadian stocks surged on Friday

Image Source : Krish Capital Pty Ltd

Index Update:  After opening much higher than yesterday's close, the benchmark S&P/TSX Composite Index traded firmly positive throughout the session to reach an intraday high of 30,490.04 before finally closing at 30,471.68, up by 311.09 points (or 1.03%). Notably, the close is a record high for the index.

Macro Update:  The central banks of Canada and the U.S. are both due to announce their interest rate decisions on October 29. On the Canadian economic front, the S&P Global Canada Composite PMI recorded 46.3 in September, down from 48.4 in August, marking the 10th consecutive monthly contraction in private sector activity. Both the manufacturing (47.7 versus 48.3) and services (46.3 versus 48.6) sectors declined at a faster rate. The S&P Global Canada Services PMI fell to 46.3 in September 2025 from 48.6, marking the third straight contraction. As data in Canada mirrored the employment situation in the U.S., calls for another rate cut by Bank of Canada are also getting louder. On the monetary front, the Bank of Canada is also considering changes to how it measures its preferred inflation metrics. BoC Deputy Governor Rhys Mendes stated that as inflation is becoming more volatile, assessing underlying inflation has to undergo a new approach.

Top Movers: Among the individual stocks, Shopify Inc (6.46%), Pembina Pipeline Corp (6.03%), Constellation Software (3.27%), Bitfarms Ltd (2.69%), Nfi Group Inc (2.34%), and Vermillion Energy Inc (5.52%) were the prominent gainers.

Our Stance: The index is currently consolidating near a key support area around 30,250. Sustaining this level will be crucial for maintaining market confidence and preserving the broader uptrend. However, a decisive break below this support could indicate short-term bullish exhaustion, potentially triggering a pullback toward 30,000 and 29,800.

Commodity Update: The yen slumped sharply against the U.S. dollar, marking its biggest drop in five months after Sanae Takaichi’s LDP leadership victory signalled a tilt toward expansionary fiscal policy, challenging the Bank of Japan. Gold rose 0.95% to $3,946.10, silver gained 0.42% to $48.16, and copper edged up 0.26% to $10,740.90. Brent crude climbed 1.01% to $65.16 as OPEC+ opted for a smaller-than-expected output increase.

Technical Update:

On Friday, the S&P/TSX Composite Index advanced 311.09 points (1.03%) to close at 30,471.68. The gain was supported by strong trading volumes, reflecting sustained investor confidence and reinforcing the prevailing bullish momentum. Technically, the index remains in a firm uptrend, trading well above its 21-period Simple Moving Average (SMA), which continues to act as dynamic support. Momentum indicators also remain robust, with the RSI at 82.70, highlighting persistent buying pressure, though it now hovers near the overbought zone. The index is currently consolidating near a key support area around 30,250. Sustaining this level will be crucial for maintaining market confidence and preserving the broader uptrend. However, a decisive break below this support could indicate short-term bullish exhaustion, potentially triggering a pullback toward 30,000 and 29,800.