Canadian Shares Climb Slightly as Cautious Investors Adopt a Conservative Strategy
The Canadian stock market posted modest gains on Tuesday, with the benchmark S&P/TSX Composite Index ending the day at a new record closing high of 28,615.62. The Index gained 51.17 points (or 0.18%).
In the world of trading, major sectors that gained were Materials (1.75%), Healthcare (1.41%), Energy (0.91%), and IT (0.19%). Among the notable gainers were Torex Gold Resources Inc (10.98%), Aya Gold and Silver Inc (9.60%), Brp Inc (6.32%), First Majestic Silver Corp (5.49%), Bausch Health Companies Inc (4.13%), and Quarterhill Inc (13.89%).
However, some sectors experienced losses. Major sectors that lost in today's trading were Communication Services (0.48%), Consumer Staples (0.51%), Consumer Discretionary (0.92%), and Real Estate (1.45%). BCE Inc, Maple Leaf Foods, Golden Activewear, and Canadian Tire Company were among the notable losers.
The Canadian economy faced challenges as well. Domestic growth data from the second quarter of 2025 showed a contraction of 1.6%. This contraction could increase the certainty of a rate cut in September, as a contraction in job numbers could indicate a slowing economy. The Bank of Canada's next interest rate announcement is scheduled for September 17.
The manufacturing sector in Canada has been dented by US tariffs, with Canadian manufacturing suffering a seventh consecutive month of contraction. The S&P Global Canada Manufacturing PMI rose to 48.3 in August from 46.1 in July, but this rise did not alleviate the contraction.
In the US, traders are looking forward to the US non-farm payrolls due on Friday, which could impact the US Fed's decision on interest rates. Meanwhile, the US Court of Appeals for the Federal Circuit ruled that most of the tariff levies by US President Donald Trump are illegal. However, the tariffs levied by the US on its trading partners, including Canada, remain in place while the US government appeals the verdict in the Supreme Court.
Analysts anticipate the release of Canada's latest job numbers this Friday. The Bank of Russia, on the other hand, recently lowered its key interest rate to 17% per annum on September 12, 2025. Analysts expect inflation to decline to 6-7% by the end of 2025 and to return to the 4% target by 2026, with the Bank of Russia maintaining a tight monetary policy to achieve this goal.
In summary, while the Canadian stock market experienced modest gains, the economy faced challenges, with a contraction in domestic growth and a seventh consecutive month of contraction in the manufacturing sector. The US Court of Appeals' ruling on tariff levies has not yet affected the tariffs on Canada, and traders look forward to the US non-farm payrolls and Canada's latest job numbers.
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