TSX Futures Point to Third Weekly Loss

The S&P/TSX Composite Index fell around 0.3% to below the 31,800 mark on Friday, setting the index on track for a third straight weekly loss of nearly 2.5%, as investors monitored escalating Middle East tensions. Materials stocks were the primary laggards following a sharp drop in gold prices with Agnico Eagle Mines, Barrick Gold, and Wheaton Precious Metals plunging around 6%. Financial heavyweights remained under pressure as Royal Bank of Canada and the Bank of Nova Scotia fell over 1% despite earlier stability from the Bank of Canada holding rates steady at 2.25% on March 18th. Energy producers provided a partial cushion as Cenovus Energy surged nearly 4% and Canadian Natural Resources rose over 1% amid ongoing geopolitical tensions in the Middle East. These developments followed recent data showing retail sales rose 1.5% in January and a 5.4% advance in the PPI while traders monitored diplomatic signals from US and Israeli leadership regarding the vital Strait of Hormuz.

Futures tracking the S&P/TSX Composite Index declined Friday, putting the index on track for a third straight weekly loss, on continued worries of stagflation amid soaring energy prices. The surge in oil prices drove a gauge tracking Canadian energy equities to surge more than 38% this year, but generated concerns of inflation that pressured the outlook for financial services providers. Yesterday, the Bank of Canada held interest rates steady but warned it stands ready to raise them if inflation pressures return, keeping banking stocks under pressure. A hawkish outlook for the central bank was further supported by data released before the open, with both retail sales and producer prices rising sharply.

The S&P/TSX Composite Index fell 1.4% to close at 31,855 on Thursday as a sharp retreat in precious metals and broader market volatility weighed on Canadian equities. Materials stocks were the primary laggards following a drop in gold prices with Agnico Eagle Mines falling 5.7%, Barrick Gold plunging 5.4%, and Wheaton Precious Metals tumbling 5.9%. Financial heavyweights also faced downward pressure as Royal Bank of Canada and the Bank of Nova Scotia fell over 1.2% despite some recovery from session lows in the broader banking sector. Energy producers remained a resilient pocket of the market as Canadian Natural Resources climbed 3% and Cenovus Energy jumped 4.2% amid ongoing supply concerns linked to the Middle East conflict. These gains were insufficient to fully counter the losses in resource and railway sectors as Canadian Pacific and Canadian National both fell over 1.1% while investors monitored diplomatic efforts to reopen the Strait of Hormuz.