NewsGlobalTSX Composite Index Reaches Record High as Gold Demand and Materials Drive Market GainsTSX Composite Index Reaches Record High as Gold Demand and Materials Drive Market Gains
The S&P/TSX Composite Index reached a new record high of 33,090.96 points with a 0.2% gain, driven by materials sector strength as gold hit record prices. Canadian inflation rose 2.4% year-over-year in December, supporting expectations for unchanged Bank of Canada rates. While materials gained 2.2%, technology declined 1.3% amid broader global market volatility.
*this image is generated using AI for illustrative purposes only.
Canada's main stock index achieved another milestone on Monday, with the S&P/TSX Composite Index closing at a record high of 33,090.96 points. The index gained 50.41 points, representing a 0.2% increase that surpassed Friday's previous record closing high. Trading activity remained subdued due to the closure of U.S. markets for Martin Luther King Jr. Day.
Market Performance by Sector
The materials sector emerged as the primary driver of market gains, with metal mining shares benefiting significantly from increased safe-haven demand for gold. The sector's strong performance coincided with gold prices reaching record highs as investors sought refuge amid global market uncertainties.
| Sector | Performance | Change (%) |
|---|---|---|
| Materials | Leading gains | +2.2% |
| Energy | Positive momentum | +0.5% |
| Consumer Staples | Modest gains | +0.2% |
| Technology | Significant decline | -1.3% |
| Financials | Moderate losses | -0.5% |
Despite the overall positive market performance, six of the ten major sectors ended the session in negative territory. The technology sector experienced the most substantial decline, falling 1.3%, while the heavily weighted financials sector lost 0.5%.
Inflation Data and Monetary Policy Implications
Canadian inflation data released showed consumer prices rising 2.4% year-over-year in December, exceeding market expectations. The increase was primarily attributed to base effects from the previous year's sales tax break. However, core inflation measures, which are closely monitored by policymakers, continued their cooling trend for the third consecutive month.
| Economic Indicator | December Reading | Trend |
|---|---|---|
| Consumer Price Index | +2.4% YoY | Above expectations |
| Core Inflation Measures | Cooling trend | Third consecutive month decline |
| Bank of Canada Rate | 2.25% | Three-year low |
The inflation data supports investor expectations that the Bank of Canada will maintain its benchmark interest rate at the current three-year low of 2.25% during its upcoming decision next week.
Global Market Context
The TSX's record performance occurred against a backdrop of global market volatility. International stocks declined and the U.S. dollar weakened against safe-haven currencies including the Japanese yen and Swiss franc. This market movement followed statements from U.S. President Trump regarding potential additional tariffs on European goods related to opposition to his planned Greenland initiatives.
Josh Sheluk, portfolio manager at Verecan Capital Management, noted that with markets trading near all-time highs, periodic volatility when risks emerge is not surprising. The flight to safety contributed to gold's record-breaking performance, which in turn supported the materials sector's strong showing on the TSX.
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