TSX Outperforms Peers

Canada’s S&P/TSX Composite Index dropped around 0.3% to 34,300 on Monday, joining a global retreat as war in the Middle East sparked a shift away from riskier assets. While the broader market fell, energy and mining stocks provided a cushion. Suncor and Canadian Natural Resources jumped over 2.5% as oil prices surged due to the closure of the Strait of Hormuz, while Agnico Eagle and Kinross gained on record gold prices. A bright spot in the industrial sector was Cameco, which rose around 1% following a 2.6 billion dollar uranium deal with India announced during Prime Minister Mark Carney’s visit to New Delhi. However, these gains were offset by a 1.5% slide in major banks like RBC and TD, along with a 2.9% drop for Shopify, as investors worried that rising energy costs could lead to higher inflation and more restrictive interest rate policies. Economically, the latest manufacturing report showed the best conditions in 13 months

Futures tracking the S&P/TSX Composite Index fell on Monday, mirroring global equity declines as Middle East tensions escalated, raising fears of a prolonged conflict. Meanwhile, investors assessed the impact on energy markets, particularly shipping through the Strait of Hormuz, driving oil prices higher and boosting safe-haven assets like gold, supporting mining and oil stocks. Separately, Prime Minister Mark Carney announced that Canada and India aim to conclude a free trade agreement by year-end, and the two nations agreed on a $2.6 billion uranium deal, under which Cameco will supply fuel to India.

Canada’s S&P/TSX Composite Index fell 0.5% to close at 34,340 on Friday, retreating from record levels as a cocktail of hot US inflation and domestic growth concerns weighed on Bay Street. While the economy expanded 0.2% in December, the broader fourth-quarter contraction of 0.6% remained a significant drag on investor confidence. The decline was primarily led by a 4.3% slump in Shopify, as software and AI infrastructure names globally faced a sharp correction following "hotter than expected" US producer price data. Financials also struggled, with Royal Bank falling 1.8% and TD Bank losing 1.7% amid fears of sticky inflation. On the upside, energy and materials provided a vital buffer as oil prices climbed and gold hit two-month peaks. Enbridge gained 1.4% and Agnico Eagle rose 1.6%, while Fairfax Financial added 0.4% on news it is the frontrunner to acquire India’s IDBI Bank. Despite the daily dip, the TSX still capped a volatile week with a 1.5% gain and a monthly advance of 7.6%.