Canada’s primary stock index surged to a five-week peak on Monday, buoyed by gains in energy and industrial stocks. Investors welcomed news that the country would avoid immediate U.S. trade tariffs under President Donald Trump’s administration.
The Toronto Stock Exchange’s S&P/TSX composite index rose by 103.66 points, or 0.4%, closing at 25,171.58. This marks its fifth consecutive day of gains and the highest closing level since December 13.
Trump, on his first day in office, will issue a broad trade memo that halts the imposition of new tariffs. However, the memo will instruct federal agencies to review U.S. trade relationships with China, Canada, and Mexico, according to a Trump administration official. The president had previously threatened to impose a 25% tariff on Canadian imports.
“There’s a collective sigh of relief,” said Greg Taylor, portfolio manager at Purpose Investments. “This is likely more measured than many had feared, which is why we’re seeing a positive response in the markets, with energy stocks and materials seeing a bounce.”
Trading volumes were lighter than usual due to U.S. markets being closed for Martin Luther King Jr. Day. “Tomorrow, we’ll get a clearer picture once more players are back, but for now, this is a positive start to the next four years,” Taylor added.
The Bank of Canada has indicated that Canadian businesses anticipate higher demand and sales in the coming year, largely driven by interest rate cuts. However, concerns remain over the potential impact of U.S. policies.
Industrial stocks gained 0.8%, boosted by a 7.2% increase in the shares of business jet manufacturer Bombardier Inc. Energy stocks rose 2.3% despite lower oil prices, with Canadian Natural Resources Ltd., the country’s largest oil and gas producer, seeing a 4.4% rise. The materials sector, which includes metal mining shares, increased by 1.2%, supported by rising gold prices.
