Canadian Stocks Jump As Precious Metal Surge Lifts Materials Sector

(RTTNews) - Canadian stocks posted sharp gains on Monday as a surge by precious metal prices jacked up Canada's material sector even as a central bank business survey revealed trade uncertainty as the pressing concern for domestic Canadian firms.

After opening well-above the previous week's close, the benchmark S&P/TSX Composite Index hit an intraday high of 30,439.06 within a few minutes and then traded firmly positive throughout the session to finally close at 30,416.44, up by 307.96 points (or 1.02%).

Nine of the 11 sectors posted gains today, with the healthcare sector leading the pack.

In the U.S., the government shutdown entered day number 20 today.

Even as the closure rolls into the third week, White House economic advisor Kevin Hassett stated in an interview to CNBC, "I think the Schumer shutdown is likely to end sometime this week."

The recent U.S.-China trade friction that sprang up due to China's restrictions on its rare earth mineral exports to the U.S. is now showing signs of de-escalation.

U.S. President Donald Trump acknowledged last weekend that high tariffs on China are not sustainable and admitted that China is paying a lot of money to the U.S. Striking an affable tone, Trump indicated he could do more for China if they make some concessions.

In addition, Trump confirmed that he will be meeting Chinese President Xi Jinping in South Korea later this month as scheduled.

U.S. Treasury Secretary Scott Bessent also announced that he will be meeting Chinese Vice Premier He Lifeng in Malaysia to hammer out a tariff truce.

These developments coupled with Hassett's remarks rekindled optimism among traders both in Canada and the U.S.

Canadian Prime Minister Mark Carney is set to amend the relation with the U.S. on the trade front as well as to bring the domestic economy back on track.

Canada has been hit hard by 35% U.S. tariffs. The Canada-United States-Mexico Free-Trade Agreement is offering some cushion against these tariffs. That pact is set for renewal in about six months with no clues on how Trump intends to tweak the deal.

As Carney's recent trip to the Washington to meet Trump did not yield a productive breakthrough on tariffs and neither did it shed any light on CUSMA negotiations, he was labelled "returning empty-handed" by the Canadian opposition.

Trump has been pressuring various U.S. companies to re-shore jobs back to the U.S.

Automaker Stellantis announced plans to transfer production from Canada to the U.S., (the Jeep Compass model) which will shift a plant from Ontario, Canada to Illinois and put many workers in Canada out of a job.

As business sentiments weakened, union leaders and the opposition have called for enforcing retaliatory tariffs against the U.S., but Carney brushed aside the demands and stated that the U.S.-Canada talks were heading in the right direction.

According to a business outlook survey conducted by Bank of Canada, more firms are now preparing themselves against a possible recession and hence hesitant to invest in hiring or growth. Around two-thirds are expecting a downturn in the next 12 months.

Data released by Statistics Canada today revealed that industrial product prices rose 0.8% month-on-month industrial in September(the fourth consecutive monthly increase). Year-on-year, prices increased 4%, led primarily by a 44.3% surge in prices for unwrought gold, silver, and platinum group metals, and their alloys.

The materials and mining sector has been benefitting from a gold rally and consequently pushing up the index.

The Consumer Price Index report for September to be released tomorrow may shed more light on inflation.

Last Friday, BoC Governor Tiff Macklem stated that more emphasis will be laid on potential risks to the economy in the background of heightened trade uncertainty.

Markets are pricing in that the Bank of Canada will lower the interest rates at its upcoming October 29 monetary policy decision meeting.

Major sectors that gained in today's trading were Healthcare (3.16%), Materials (2.33%), Industrials (0.81%), Financials (0.79%), and Energy (0.57%).

Among the individual stocks, Curaleaf Holdings Inc (4.48%), Ngex Minerals Ltd (12.71%), Perpetua Resources Corp (7.96%), Lundin Gold Inc (7.62%), Skeena Resources Ltd (7.12%), Discovery Silver Corp (6.74%), and Badger Infrastructure Solutions Ltd (3.64%) were the prominent gainers.

Major sectors that lost in today's trading were Consumer Staples (0.69%) and Communication Services (0.90%).

Among the individual stocks, Loblaw CO (1.52%), Metro Inc (0.87%), Telus Corp (1.58%), Rogers Communications Inc (1.55%), and BCE Inc (1.50%) were the notable losers.