The Canadian market ended modestly lower on Tuesday

Image Source : Krish Capital Pty Ltd

Index Update: The Canadian market ended modestly lower on Tuesday as hot inflation data, and growth worries due to Trump's tariffs weighed on sentiment. Also, investors stayed cautious ahead of the Federal Reserve's monetary policy announcement, due on Wednesday. The benchmark S&P/TSX Composite Index closed down 79.04 points or 0.32% at 24,706.07, recovering well from a low of 24,572.33.

Macro Update: Data from Statistics Canada said the annual inflation rate in Canada jumped to 2.6% in February from 1.9% in the previous month, the highest in eight months, as a sales tax break that ended mid of last month pushed prices higher amid an already broad-based price increase.

Top Movers: Tilray, Westshore Terminals and Corus Entertainment gained 5.2 to 5.5%. Ero Copper, Fortuna Silver Mines, Interfor, Torex Gold Resources, Lundin Gold, Brookfield Business Partners, Centerra Gold, First Quantum Minerals, OceanaGold, Seabridge Gold, Canfor, Hudbay Minerals, Canadian Tire Corporation and B2Gold Corp climbed 1.7 to 4%.

Our Stance: The index remains below its 21-period Simple Moving Average (SMA), reinforcing the ongoing downtrend and indicating sustained selling pressure. Momentum indicators suggest a cautious outlook, with the Relative Strength Index (RSI) at 46.48, approaching oversold territory. While this could signal the potential for a short-term rebound, downside risks remain. 

Commodity Update: The yen fluctuated between losses and gains on Wednesday after the Bank of Japan (BOJ) kept interest rates unchanged, as expected. Meanwhile, the dollar struggled to regain strength ahead of the Federal Reserve’s policy decision. In the commodities market, gold rose 0.06% to $3,042.50, after reaching an all-time high on Tuesday. Silver dropped 0.57% to $34.69, and copper fell 0.15% to $9,901.00. Brent crude declined 0.20% to $70.44 following an agreement between Russia and U.S. President Trump to halt attacks on each other's energy infrastructure temporarily, potentially allowing more Russian oil in global markets.

Technical Update: On Tuesday, the S&P/TSX Composite Index declined by 79.04 points, or 0.32%, closing at 24,706.07. The downturn was largely driven by weakness in the technology sector, which fell 1.61%, weighing on overall market sentiment. The index remains below its 21-period Simple Moving Average (SMA), reinforcing the ongoing downtrend and indicating sustained selling pressure. Momentum indicators suggest a cautious outlook, with the Relative Strength Index (RSI) at 46.48, approaching oversold territory. While this could signal the potential for a short-term rebound, downside risks remain. The key support level to monitor is 24,500, aligning with a critical horizontal trendline. Holding above this level may provide a foundation for stabilization and a possible recovery. However, a break below could accelerate losses, with further downside targets at 24,200 and 24,000.