TSX Hovering Roughly Flat; Energy Sector Finds Its Footing

Canada’s stock market is barely moving on Friday, with the S&P/TSX Composite Index inching up just 6.51 points or 0.02% to reach 33,035.43 around midday. The index started the day weaker at 32,859.84 but recovered to 33,073.46 before pulling back slightly, reflecting the cautious sentiment gripping traders.

Trade Optimism Lifts Sentiment

A breakthrough on the Canada-China trade front is providing some uplift to investor confidence. Canadian Prime Minister Mark Carney has finalized an initial trade agreement with China that includes tariff cuts on electric vehicles and canola, with both nations committing to dismantle additional trade barriers and forge stronger strategic partnerships. This development appears to be supporting equities, though gains remain muted.

Energy Stocks Lead Gainers

The energy sector is the bright spot in today’s session. Headwater Exploration is soaring roughly 5% after reporting impressive 12% year-over-year production per share growth, coupled with robust cash flow and disciplined capital spending. International Petroleum Corp is up 2.7%, while Parex Resources, Prairiesky Royalty, Tamarack Valley Energy, Imperial Oil, Suncor Energy and Vermilion Energy are advancing between 1.3% and 2.4%.

Industrials Post Strong Gains

The industrials segment is posting notable strength, with MDA surging more than 13%. Richelieu Hardware is climbing 5.7%, while Finning International, Exchange Income, Badger Infrastructure and Bombardier are gaining 2% to 3%.

Tech and Materials Struggling

Technology shares are under pressure, with Dye & Durham plummeting over 10%, followed by Blackline Safety Corp and Constellation Software down 5% and 3.5% respectively. Open Text Corp and Tecsys are also moving lower. The materials sector is equally weak, with Ivanhoe Mines, SSR Mining, Aya Gold & Silver, Equinox Gold, Endeavour Silver, First Quantum Minerals, Teck Resources and Pan American Silver Corp among the major decliners.

Housing Starts Accelerate

On the economic front, Canadian housing starts climbed to 282,400 units in December, up from 254,600 in November, according to Canada Mortgage and Housing Corporation data, suggesting continued strength in the residential construction segment.