Canada's main stock index, the S&P/TSX composite, rose by 0.2% to close at 34,478.74 on Monday, driven by gains in energy and technology sectors following eased tensions in the Middle East.
The Toronto Stock Exchange saw a recovery from Friday's sharp decline, with energy stocks climbing 1.6% as oil prices settled 0.8% higher at $91.30 per barrel. Technology shares also contributed to the gains, with Celestica Inc rising 3.8%. The market's positive movement was supported by a halt in hostilities between Iran and Israel after U.S. President Donald Trump's intervention.
TD Cowen's decision to raise price targets on Canadian defense companies, including Bombardier Inc and Magellan Aerospace, further buoyed the market. Magellan's shares surged 6.4%, while the financial sector saw a modest increase of 0.4%. However, Air Canada shares fell 0.7% amid the Canadian government's announcement of a new loan program to assist airlines with high fuel costs.
“For the markets, they're taking it more in stride now. It's like anything that goes on for a long period of time... the bar is very high to have an effect.”
Allan Small, senior investment advisor at Allan Small Financial Group with iA Private Wealth
Investors are now focused on the upcoming Bank of Canada interest rate decision, expected on Wednesday. The central bank is anticipated to maintain its benchmark interest rate at 2.25% for the fifth consecutive meeting, according to a Reuters poll of economists.
"For the markets, they're taking it more in stride now," said Allan Small, senior investment advisor at Allan Small Financial Group with iA Private Wealth. "It's like anything that goes on for a long period of time... the bar is very high to have an effect."
Background
The TSX's rebound reflects a broader recovery in global markets, with U.S. stocks also bouncing back after Friday's selloff. The easing of Middle East tensions has provided a temporary relief to investors, though ongoing geopolitical risks remain a concern.
Looking ahead, market participants will closely monitor the Bank of Canada's interest rate decision and its implications for the Canadian economy. The outcome could influence investor sentiment and market dynamics in the coming weeks.
