TSX Sheds Nearly 1% On Tariff Jitters

Image Source : Krish Capital Pty Ltd

Index Update: The Canadian market ended notably lower on Thursday, with its benchmark S&P/TSX Composite Index falling to a four-and-a-half-month low, as rising concerns about global economic growth due to the trade war triggered heavy selling at several counters from across various sectors. The S&P/TSX Composite Index closed down 220.11 points or 0.9% at 24,203.23, nearly 60 points off the day's low of 24,145.59.

Macro Update: After U.S. President Donald Trump slapped new tariffs on steel and aluminum exported by Canada into the U.S., the Canadian government announced retaliatory tariffs on $29.8 billion of U.S. goods.

Top Movers: Shares of First Quantum Minerals Ltd zoomed 14.4% after Panama authorized the sale of copper concentrate at the company's shuttered Cobre Panama mine. First Majestic Silver, Birchcliff Energy, Algoma Steel, Novagold, Orla Mining and B2Gold Corp climbed 6 to 9.3%.

Our Stance: The index remains below its 21-period Simple Moving Average (SMA), reinforcing the prevailing downtrend and indicating sustained selling pressure. Momentum indicators suggest a cautious outlook. The key support level to watch is 24,100, aligning with a critical horizontal trendline. Holding above this level may provide a foundation for stabilization and potential recovery. However, a break below could accelerate losses, with further downside targets at 23,900 and 23,700. 

Commodity Update: The U.S. dollar strengthened on Friday as the euro pulled back from a five-month high, amid rising global trade tensions and fears of a potential economic downturn. In commodities, gold increased 0.21% to $2,997.60, silver gained 0.71% to $34.55, and copper rose 0.69% to $9,819.20. Brent crude climbed 0.40% to $70.60, bolstered by tighter U.S. sanctions on Iranian oil and shipping. However, oil was set for weekly losses due to concerns over oversupply, as Russia-Ukraine ceasefire talks and trade tensions added pressure on the market.

Technical Update: On Thursday, the S&P/TSX Composite Index declined by 220.11 points, or 0.90%, closing at 24,203.23. The downturn was primarily driven by weakness in the technology sector, which fell 3.23%, weighing heavily on overall market sentiment. The index remains below its 21-period Simple Moving Average (SMA), reinforcing the prevailing downtrend and indicating sustained selling pressure. Momentum indicators suggest a cautious outlook, with the Relative Strength Index (RSI) at 35.94, approaching oversold territory. While this could signal a short-term rebound, downside risks persist. The key support level to watch is 24,100, aligning with a critical horizontal trendline. Holding above this level may provide a foundation for stabilization and potential recovery. However, a break below could accelerate losses, with further downside targets at 23,900 and 23,700.