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TSX Closer: The Index Rises on Stronger Tech and Financial Issues

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The S&P/TSX Composite Index closed higher on Friday as gains in technology, industrial and financial stocks outweighed weakness in energy, while investors assessed lower oil prices and fresh Canadian economic data.

The index closed up 191.21 points, or 0.5%, to 35,697.49 with mixed sectors. Information Technology led advancers, up 3.6%, followed by Industrials and Financial that closed up 0.7% and 0.6%, respectively. Energy was down 0.7%.

The Battery Metals Index, which includes companies listed both on the TSX and TSX Venture Exchange, dropped 6.4%.

In commodities, West Texas Intermediate (WTI) and Brent crude fell on Friday as reports of possible diplomatic efforts to ease tensions around the Strait of Hormuz tempered concerns over immediate supply disruptions following Thursday's sharp rally. The October WTI crude oil contract settled down $2.43, or 2.3%, to $100.05 per barrel, while November Brent oil was last seen down $2.68, or 2.5%, to $104.95 per barrel.

Meanwhile, December Comex gold futures dropped 0.4%, or $19.30, to $4,388.00 per ounce at last look.

In currencies, the US dollar edged higher 0.2% against the Canadian dollar, with USD/CAD at 1.3864 at last look. However, Scotiabank expects USD/CAD to fall, with a target of $1.37 by year-end and $1.33 by the last quarter of 2027. The loonie has remained resilient despite heightened trade tensions, with economic data suggesting the Canadian economy continues to show strength, wrote the bank in a note.

On household finances, Canadian household net worth climbed 2.9% quarter over quarter in the second quarter to more than CA$19 trillion, fueled by equity market gains that boosted the value of household assets, Statistics Canada said on Friday.

Household liabilities rose 1.3% in the second quarter, with residential mortgages making up nearly three-quarters of total household debt. While household credit market debt as a share of disposable income fell from 178.6% to 176.4%, marking its largest quarterly decline since the third quarter of 2024, the agency said.

In corporate news, Bank of Montreal (BMO.TO) and the Canadian Imperial Bank of Commerce (CM.TO) both announced multi-billion dollar initiatives to support critical sectors in the Canadian economy. BMO said Friday it plans to mobilize up to CA$70 billion over 10 years, targeting electricity, energy and transportation infrastructure, among other sectors including defense, mining and artificial intelligence. CIBC late Thursday committed CA$2 billion to support funding for small and medium-sized defense-related and dual-use businesses across Canada.

What else is happening in International?

International

El Niño Climate Phenomenon Could Pose Risk to Pasture-Based Agriculture in New Zealand, Westpac Says

A developing El Niño climate phenomenon pattern threatens an increased risk of drought in many parts of New Zealand, with the main economic risk being to pasture-based agriculture, Westpac said in a report on Friday.A strong El Niño is developing and could intensify further, raising the risk of hot, dry conditions across parts of New Zealand over summer. It is expected to strengthen further in the next few months and persist into mid-2027. Dairy, sheep and beef farming in particular are at risk, where drought can reduce pasture growth, lower production, raise costs and disrupt processing patterns across the season.In worst-case scenarios, severe droughts in the past have led to as much as one percentage point being cut from gross domestic product growth.There is a clear downside risk to agricultural production, and these impacts are predominantly supply-side effects that reduce potential output. However, the impact is highly uncertain, the bank cautioned.Inflation effects are likely to be mixed but pointing higher, with potential upward pressure on dairy and imported food prices, partly offset by downward pressure on meat prices in the near-term.

^NZ50
International

Australian Card Transaction Activity Softens in Late August But Quarterly Growth Continues to Firm, Westpac Says

Australian card transaction activity fell slightly in late August from a historical high earlier in the month, although quarterly growth momentum has continued to strengthen and is now in the 1.3% to 1.5% range, Westpac said in a Thursday report.The Westpac-DataX Card Tracker Index fell to 158.1 in the week ended Aug. 29, a decline of 1.1 points from the 159.2 reading for the week ended Aug. 8, the report showed.While the quarterly growth marks the strongest pace of expansion since late March, more of the gain now appears to be coming from higher fuel spend as petrol prices have again topped AU$2 per liter following the end of temporary excise tax cuts, the bank said."The latest card tracker data shows a pick-up in nominal spending growth momentum but a significant part of the lift, potentially up to half, looks to relate to higher prices rather than volumes," Westpac said.Meanwhile, monthly growth momentum saw some softening, tracking a milder 0.2% gain for August, down from the 0.7% to 0.9% pace registered from May through July.Victoria continues to lead other regions, with quarterly growth running at 2.2% compared with growth rates of 0.9% to 1.5% across other major states, the bank said.

ASX 200
International

Large Japanese Manufacturers' Sentiment Rebounds in Q3

The business survey index, or BSI, for large manufacturers in Japan rose 7.6% in the third quarter, reversing the 1.8% contraction in the second quarter, according to data from the Ministry of Finance's Policy Research Institute on Friday.That reading beat the consensus forecast for 2.5% growth, according to Investing.com.Meanwhile, the non-manufacturing sector's BSI rose 4.2% in the July-to-September period, recovering from a flat movement in the previous quarter.The all-industries BSI jumped 5.3% during the third quarter, also rebounding from the 0.5% decline previously.

Nikkei 225