Despite rising commodity prices and easing Treasury bond yields, the Canadian stock market turned negative on Friday as hotter-than-expected U.S. wholesale inflation data suggested that inflation may take longer to cool than previously anticipated, which could delay additional rate cuts. The S&P/TSX Composite Index fell by 162 points, or 0.5%, for the day to settle at 34,340, ending its three-day winning streak.
On the one hand, strong metals and oil prices drove shares of mining and energy companies higher, while utility stocks also saw renewed buying. On the other hand, sharp declines in other key sectors like technology, financials, and consumer cyclicals weighed on the broader index and offset gains in resource-linked stocks.
Top TSX Composite movers and active stocks
Aritzia, TerraVest Industries, Energy Fuels, and BRP were the worst-performing TSX stocks for the day, with each diving by over 5%.
On the flip side, CCL Industries and Aya Gold & Silver climbed by at least 5.8%, making them the day’s top-performing TSX stocks.
TransAlta (TSX:TA) was also among the Toronto Stock Exchange’s top gainers as it climbed 5.3% to $18.75 per share. This rally in TA stock came after the company announced it had signed a memorandum of understanding with Canada Pension Plan Investments and Brookfield to advance a major data centre development at its Keephills site in Alberta. This agreement included an initial long-term power purchase arrangement for about 230 megawatts, with the potential to scale the project up to one gigawatt of load.
In addition to this strategic update, TransAlta also reported strong fourth-quarter free cash flow of $93 million and increased its annual dividend by 8% to $0.28 per share. The combination of a sizeable potential data centre partnership and dividend increase boosted investor confidence, sending TA shares higher.
Based on their daily trade volume, Suncor Energy, Canadian Natural Resources, Enbridge, Manulife Financial, and Cenovus Energy were the five most active stocks on the exchange.
TSX today
West Texas Intermediate (WTI) crude oil futures jumped by as much as 11% in early trading on Monday, as investors reacted to significantly escalating conflict in Western Asia, which started after the U.S. and Israel attacked Iran in a combined operation over the weekend, killing Iran’s supreme leader. The sharp spike in oil prices could provide a strong tailwind for TSX energy stocks at the open today, especially large-cap producers. However, heightened geopolitical tensions may also weigh on broader risk sentiment and increase market volatility.
Canadian investors will keep an eye on the latest manufacturing data from both sides of the border this morning for clues about industrial activity and demand trends.
On the corporate events front, some TSX-listed companies, like InterRent Real Estate Investment Trust, Capstone Copper, and K92 Mining, will announce their latest quarterly results today, which could keep their stocks in the spotlight.
Market movers on the TSX today
