Updated January 13th, 2024 at 11:39 IST

TSX achieves highest weekly close in nearly two years driven by bullish technicals

The Toronto market has been consistently setting higher peaks and troughs since October, resulting in a notable gain of nearly 12% over that period.

Reported by: Business Desk
Toronto | Image:Unsplash
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The main stock index in Canada, the Toronto Stock Exchange (TSX), experienced a notable rise on Friday, marking its highest weekly closing level in 21 months. This upward momentum was supported by gains in technology and resource sectors, coupled with positive technical signals for the market.

The S&P/TSX composite index on the Toronto Stock Exchange concluded the day with a 0.3 per cent increase, adding 71.82 points to reach 20,990.22, achieving its highest weekly closing level since April 2022. The week recorded a 0.3 per cent overall gain.

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Brandon Michael, Senior Investment Analyst at ABC Funds, highlighted the significance of technical factors in driving the market higher. Despite the market's confusion fuelled by news flow, geopolitics, and interest rates, Michael stressed that bullish technical indicators play a crucial role in the current market dynamics.

The Toronto market has been consistently setting higher peaks and troughs since October, resulting in a notable gain of nearly 12 per cent over that period. The technology sector, contributing to this rally, experienced a 0.7 per cent increase on Friday.

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Energy stocks also saw a 0.6 per cent rise, with the price of oil settling 0.9 per cent higher at $72.68 a barrel. This increase followed overnight air and sea strikes by the US and Britain on Houthi targets in Yemen.

The materials sector, encompassing precious and base metals miners, as well as fertilizer companies, recorded a 1.6 per cent gain. This was attributed to the price of gold benefiting from safe-haven buying and the potential for Federal Reserve interest rate cuts, especially in light of a softer-than-expected reading on US producer prices in December.

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Shares of Canadian uranium miners, including Cameco, Denison Mines, and NexGen Energy Ltd, surged in response to Kazakhstan-based miner Kazatomprom's announcement of a production shortfall in 2024. NexGen Energy Ltd, in particular, experienced an 11.1 per cent increase.

Overall, the TSX's positive performance underscores the impact of technical indicators and sector-specific factors driving the market to its recent milestones.

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(With Reuters Inputs)

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Published January 13th, 2024 at 11:39 IST