On Friday, the Canadian stock market exhibited a mixed performance, with the Toronto Stock Exchange’s S&P/TSX composite index closing lower due to the strengthening of the U.S. dollar. However, despite this minor setback, the index managed to secure its sixth consecutive weekly gain, indicating the overall resilience and positive momentum of the Canadian equities market. Ending the trading session down 103.18 points, or 0.5%, the index settled at 21,984.08. This decline came after the index achieved a notable milestone earlier in the week, reaching its first record high closing level in two years, which underscored the underlying strength of Canadian stocks.
Over the course of the week, the S&P/TSX composite index recorded a gain of 0.6%, marking its longest winning streak since December 2020. Allan Small, Senior Investment Advisor of the Allan Small Financial Group with iA Private Wealth, provided insights into the day’s market dynamics, highlighting that investors opted to take profits off the table across various sectors amid the backdrop of a strengthening U.S. dollar. Small emphasized the adverse impact of U.S. dollar strength on commodities, which represent a significant component of the Canadian market, as it is heavily weighted in that space.
The resource sector, which constitutes approximately 30% of the Toronto market, faced downward pressure, with the materials sector experiencing a 1% decline. This decline was fueled by drops in prices of key commodities such as gold and copper. The appreciation of the U.S. dollar for the second consecutive week contributed to making commodities priced in U.S. currency more expensive for buyers using other currencies, dampening demand.
In addition to the resource sector, other sectors such as financials and technology also witnessed losses, with financials dipping by 0.6% and technology by 1.1%. Despite the broader market downturn, there were notable exceptions, with shares of Tilray Brands Inc surging by 19.8%. This upward movement was part of a broader trend in the cannabis sector, following news that Germany had legalized cannabis possession, sparking optimism among investors in the industry. Overall, while facing some headwinds, the Canadian stock market continued to demonstrate resilience and maintained its positive trajectory.