Canadian Stocks Surge As Trump Halts Attacks On Iran For Five Days

(RTTNews) - Rebounding from the slump over the past three sessions, Canadian stocks soared on Monday after U.S. President Donald Trump claimed U.S.-Iran talks to end the war are going well. Trump had also asked the U.S. forces to halt all planned attacks on Iran for five days.

After opening well-above the previous week's close, today the benchmark S&P/TSX Composite Index traded firmly positive throughout the session before settling at 31,883.81, up by 566.40 points (or 1.81%%).

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

Mutual attacks over the previous week between the U.S. and Israeli and Iranian forces in the ongoing gulf war pushed oil prices higher and kept up inflation concerns that triggered a fall in the index.

Last week, a massive attack by Israel on Iran's South Pars gas field, which caters to the domestic energy needs of Iran, led Iran to conduct retaliatory strikes on Qatar's largest LNG plant, Ras Laffan.

Iran's attacks devastated the facility, leaving Qatar to announce that the resumption of operation will commence only after an year.

At Trump's request, Israeli Prime Minister Benjamin Netanyahu announced pausing any attack on Iranian energy sites.

However, Iran continued its retaliation by hitting Kuwait's largest oil refinery, Mina al-Ahmadi which processes nearly 730,000 barrels per day of crude oil.

The Strait of Hormuz, the narrow water channel off Iran's coast through which nearly world's 20% of oil tankers from Arab countries pass through to other parts of the world, remains closed.

The transit disruption has led to storage constraints and many Arab countries halted oil production, catapulting oil prices.

On Saturday, Trump warned Iran to "fully" open the strait or face heavy attacks on its power supply infrastructure.

Warning of stern a response, Iran stepped up its offensive by launching two intermediate-range ballistic missiles targeting the U.S.-U.K. military base at Diego Garcia, which is 4,000 kms away from Iran.

Today in his social media post, Trump announced that the U.S. and Iran had "very good and productive" talks over the weekend and remarked that he had ordered the U.S. forces to pause any planned strikes on Iran for five days.

Though Iran's semi-official news agency Mehr disputed this claim by stating Iran was not engaged in any direct or indirect negotiations, Trump's optimistic tone on delaying the strikes was enough to calm the tension that erupted with escalation concerns.

As a result, with investor confidence boosted, stocks in Canada and the U.S. regained momentum.

Soaring oil prices have already triggered inflationary pressures and prompted global central banks to hold interest rates steady.

Last week, the Bank of Canada left interest rates unchanged at 2.25%.

In the U.S., the Federal Reserve held the rates steady in the current 3.50% to 3.75% range.

In Canada, market participants are also awaiting any breakthrough news on the ongoing Canada-U.S. negotiations on renewal of the Canada-United States-Mexico Agreement.

Months before, Trump hinted that the U.S. may pull out of the deal altogether.

Last week, the U.S. Trade Representative Jamieson Greer remarked that talks with Canada are lagging behind compared to those with Mexico.

With stakes running higher for Canada as the deal allows Canadian exporters to circumvent the Trump-imposed tariffs, the outcome of the negotiations could impact the markets in the coming weeks.

Major sectors that gained in today's trading were IT (3.35%), Materials (3.22%), Consumer Discretionary (2.78%), Consumer Staples (2.30%), and Healthcare (2.14%).

Among the individual stocks, Boralex Inc (8.63%), Firan Technology Group Corp (8.62%), Celestica Inc (6.65%), Tecsys Inc (4.45%), Transcontinental Inc (43.88%), and Lundin Mining Corp (8.46%) were the prominent gainers.

Utilities (0.32%) and Energy (1.29%) were the only two major sectors that lost in today's trading.

Among the individual stocks, Brookfield Infra Partners (2.68%), Brookfield Renewable Partners (1.22%), Vermilion Energy Inc (6.24%), International Petroleum Corporation (4.56%), and Peyto Exploration and Dvlpment Corp (3.22%) were the notable losers.