The Canadian market ended weak for a second straight day

Image Source : Krish Capital Pty Ltd

Index Update: The benchmark Canadian stock market index TSX Composite today opened lower, and despite dropping further post noon, managed to regain some lost ground and eventually settled with a modest loss of 35.51 points or 0.14% at 26,175.05. The index gained 0.6% in the week.

Macro Update: In Canadian economic news, data from Statistics Canada showed the Canadian GDP expanded by 0.5% from the previous quarter in the first three months of 2025, maintaining the revised 0.5% growth rate from the earlier period. The Canadian economy likely expanded 0.1% in April 2025, the same as in March, preliminary estimates showed.

Top Movers and Losers: Communications stocks were among the prominent gainers in the session. Cogeco Communications gained about 1.4. Energy and healthcare stocks dropped with the respective indices losing 1.76% and 1.75%. Real estate, materials, technology and industrials turned in a mixed performance. Baytex Energy (down 4.3%), Cenovus Energy (down 3.4%), Freehold Royalties (down 3.14%) and Meg Energy Corp (down 2.8%) were the major losers in the energy sector. 

Our Stance: The index is now testing a key support level of around 25,900. Holding this level is crucial for preserving the upward trajectory. A successful defense of this support could set the stage for a renewed rally. However, a clear break below 25,900 may open the door to further downside, with the next significant support zone lying between 25,600 and 25,400.

Commodity Update:  The U.S. dollar slipped Monday, retreating from last week’s gains as markets reacted to President Trump’s plan to double tariffs on steel and aluminum to 50%, raising growth and inflation concerns. Gold rose 0.45% to $3,330.20, silver gained 0.39% to $33.16, and copper climbed 0.59% to $9,572.20. Brent crude jumped 2.30% to $64.23 amid escalating Russia-Ukraine tensions and looming U.S. sanctions on Moscow.

Technical Update: The S&P/TSX Composite Index closed Friday at 26,175.05, marking a modest decline of 0.14%, driven primarily by a 1.74% drop in the healthcare sector. Despite the slight pullback, the index remains above its 21-period Simple Moving Average (SMA), signaling that the broader bullish trend is still intact. The Relative Strength Index (RSI) currently reaches 68.37, placing the market near overbought territory but still within a neutral momentum range. The index is now testing a key support level of around 25,900. Holding this level is crucial for preserving the upward trajectory. A successful defense of this support could set the stage for a renewed rally. However, a clear break below 25,900 may open the door to a further downside, with the next significant support zone lying between 25,600 and 25,400.