Canada’s main stock index finished in positive territory on Monday.
Canada’s benchmark equity index closed slightly higher on Monday. Mining stocks, especially gold producers, led the gains. Investors also assessed fresh inflation data and global political tensions. Trading volumes remained light due to a U.S. market holiday.
Market participants largely stayed on the sidelines. U.S. stock exchanges were closed for Martin Luther King Jr. Day. That absence muted overall activity in Canadian markets.
Gold Stocks Drive Market Momentum
Gold stocks emerged as the clear leaders of the session. Rising bullion prices boosted investor interest in the mining sector. Geopolitical uncertainty continued to support demand for safe-haven assets.
Ian Chong, portfolio manager at First Avenue Investment Counsel Inc., pointed to gold’s strength. He said the metal was driving most of the upside. Ongoing geopolitical noise kept investors cautious.
The February gold contract surged sharply. It rose US$81.30 to settle at US$4,676.70 an ounce. That move lifted several heavyweight mining names on the TSX.
Inflation Data Fails to Shake Investors
Fresh inflation numbers offered little surprise. Statistics Canada reported annual inflation rose to 2.4 per cent in December. The increase followed a temporary federal tax holiday last year.
Economists had expected inflation to remain steady at 2.2 per cent. The higher reading reflected unusual price comparisons during the GST break period.
Chong said the data did not change the broader outlook. Inflation remains relatively contained, despite the slight uptick. Investors largely shrugged off the release.
Business Sentiment Still Cautious
A new Bank of Canada report showed business sentiment remains subdued. However, conditions have improved from lows seen in the second quarter last year. Companies remain cautious but less pessimistic.
Chong expressed cautious optimism on economic policy. He said the government is pursuing growth through fiscal stimulus. Large infrastructure projects are part of that strategy.
Canada is also expanding trade relationships. New agreements and renewed dialogue with China could support future growth. China remains a major opportunity for Canadian exporters.
TSX Ends Session Modestly Higher
The S&P/TSX composite index finished the day in positive territory. It gained 50.41 points to close at 33,090.96. Gains in gold stocks offset weakness elsewhere.
Energy prices offered mild support. The March crude oil contract rose nine cents to US$59.43 per barrel. Oil stocks, however, showed limited movement.
The Canadian dollar strengthened slightly. It traded at 72.10 cents US, up from 71.88 cents on Friday.
Trade Tensions Weigh on U.S. Futures
U.S. stock futures slipped during Monday trading. President Donald Trump threatened new tariffs on European imports. The proposal targeted countries opposing U.S. control over Greenland.
Trump suggested a 10 per cent additional tariff. The move raised concerns about renewed global trade tensions. Markets reacted cautiously to the announcement.
Chong urged restraint in interpreting the threat. He said Trump often opens negotiations aggressively. Strong statements are usually followed by compromise.
Canada-U.S. Link Remains Key
Chong warned U.S. market weakness could spill into Canada. The two economies remain closely linked. Each country is the other’s largest trading partner.
If U.S. declines persist, Canadian equities may face pressure. Still, Chong remains optimistic. He expects trade tensions to ease over time.
With U.S. midterm elections approaching, equity markets matter to policymakers. That focus could help stabilize investor sentiment in the weeks ahead.
