TSX Climbs to Record High Amid Gold Rally and Inflation Data
Canada's main stock index achieved another record high on Monday. The S&P/TSX Composite Index closed up 50.41 points, or 0.2%, at 33,090.96. This performance surpassed the previous record set on Friday. Trading volumes remained lighter than usual due to the closure of U.S. markets for Martin Luther King Jr. Day.
Materials Sector Leads Gains as Gold Hits Record High
The materials sector, which includes metal mining shares, rose 2.2%. This surge was fueled by a flight to safety, pushing gold prices to a record high. Investors sought refuge in gold amid global market uncertainties.
Other sectors also posted gains. Energy increased by 0.5%, while consumer staples added 0.2%. However, six of the ten major sectors ended lower. Technology dropped 1.3%, and heavily weighted financials lost 0.5%.
Inflation Data Supports Expectations for Rate Hold
Consumer prices in Canada rose 2.4% year-over-year in December. This increase exceeded expectations, largely due to the base effect from the previous year's sales tax break. Core measures of inflation cooled for the third consecutive month.
Investors now anticipate the Bank of Canada will keep its benchmark interest rate unchanged at 2.25% next week. This rate represents a three-year low. The inflation data supports this expectation of a pause in rate adjustments.
Global Factors Influence Market Sentiment
Global stocks declined on Monday. The U.S. dollar eased against safe-haven currencies like the yen and Swiss franc. This movement followed threats from U.S. President Donald Trump regarding additional tariffs on European goods. The dispute centers on opposition to his planned takeover of Greenland.
Canada is considering sending a small contingent of troops to Greenland. They would participate in NATO military exercises, according to a source familiar with the matter.
Josh Sheluk, portfolio manager at Verecan Capital Management, commented on the market conditions. He noted that volatility is expected when risks emerge, especially with markets near all-time highs.
The TSX's record close highlights the impact of safe-haven demand and domestic economic indicators. Investors continue to monitor global developments and central bank policies closely.
