TSX Today: What to Watch for in Stocks on Friday, August 21

After posting its fourth decline in five sessions, the TSX could get some support from rallying metals prices today, although Middle East tensions and elevated bond yields may keep investors cautious.

Key Points
  • The TSX fell 36 points to 36,365 on Thursday, its lowest in over a week, as surging 10-year Treasury bond yields and geopolitical tensions affected investor confidence.
  • WSP Global dropped 2.6% due to uncertainties around a proposed deal with Arcadis, while Ero Copper, Kinross Gold, Sprott, and SSR Mining rose over 4%.
  • TSX mining stocks might open higher today due to a rally in metals prices, while ongoing Middle East developments could keep energy prices elevated and influence oil producers.

After a day of pause, Canadian equities resumed their downward trend on Thursday as 10-year Treasury bond yields reached their highest level in over two years, while escalating geopolitical tensions and inflation worries amid rising oil prices kept investors cautious. The S&P/TSX Composite Index slipped another 36 points to 36,365, closing at its lowest level in more than a week and posting its fourth decline in five sessions.

Even as strong oil and silver prices drove shares of energy and mining companies higher, sharp losses in most other key market sectors, including financials, consumer staples, and consumer cyclicals, pulled the TSX benchmark lower by the closing bell.

tsx today

Top TSX Composite movers and active stocks

Energy Fuels, Aritzia, CAE, and MDA Space were the worst-performing TSX stocks for the day, with each falling by at least 3.7%.

WSP Global (TSX: WSP) was also among the day’s bottom performers on the Toronto Stock Exchange, as its shares plunged by 2.6% to $190.19 apiece. This weakness in WSP stock followed a regulatory update on its proposed combination with Arcadis.

WSP said Arcadis’s boards have still not engaged with its proposals despite multiple invitations over the past several months. The company is now preparing its offer memorandum and plans to submit it to Dutch regulators by October 15. The lack of progress toward a negotiated deal raised uncertainty around the transaction and weighed on WSP shares.

On the brighter side, Ero Copper, Kinross Gold, Sprott, and SSR Mining jumped by more than 4% each, making them the session’s top-performing TSX stocks.

Based on their daily trade volume, Enbridge, Suncor Energy, Canadian Natural Resources, Ivanhoe Mines, and Telus were the five most active stocks on the exchange.

TSX today

Crude oil prices were largely mixed in early trading on Friday, while metals prices across the board staged a rally, which could lift TSX mining stocks at the open today.

While no major economic releases are due this morning, Canadian investors will continue to monitor developments in the Middle East, especially their impact on oil prices and global risk appetite. U.S. president Donald Trump has signalled a new round of tougher sanctions on Iran and warned that countries continuing to support Tehran could also face economic consequences.

At the same time, shipping activity through the Strait of Hormuz remains severely restricted. These developments could keep energy prices elevated and support TSX oil producers, while also adding to inflation concerns and pressure on rate-sensitive sectors.

Market movers on the TSX today

Fool contributor Jitendra Parashar has positions in Aritzia, Canadian Natural Resources, Enbridge, and MDA Space. The Motley Fool has positions in and recommends Aritzia. The Motley Fool recommends Canadian Natural Resources, Enbridge, MDA Space, TELUS, and WSP Global. The Motley Fool has a disclosure policy.

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