Canada-China Trade Deal Offers Modest Support; TSX Stays Roughly Flat into Afternoon

Canadian stocks are trading in narrow ranges as investors maintain a cautious stance on Friday, with the S&P/TSX Composite Index showing minimal movement. The benchmark index is hovering near the unchanged mark at 33,035.43, up just 6.51 points or 0.02%, as of mid-day trading. The index had swung between 32,859.84 and 33,073.46 during the session, reflecting the uncertain sentiment gripping the market.

Trade Development Bolsters Sentiment

Sentiment received a lift from positive trade negotiations on the Canada-China front. Canadian Prime Minister Mark Carney announced an initial trade agreement with China that includes tariff cuts on electric vehicles and canola. The deal also encompasses commitments from both nations to dismantle remaining trade barriers and establish deeper strategic partnerships. This development has provided some backbone to the equity market, though broader momentum remains constrained.

Energy Sector Emerges as Relative Strength

Energy stocks are among the session’s best performers, capitalizing on the trade headline and broader sector sentiment. Headwater Exploration leads the charge with roughly 5% gains, buoyed by 12% year-over-year production per share expansion and robust cash generation. International Petroleum Corp is advancing 2.7%, while Parex Resources, Prairiesky Royalty, Tamarack Valley Energy, Imperial Oil, Suncor Energy and Vermilion Energy are each climbing 1.3% to 2.4%.

Industrials stocks are posting stronger gains, with Mda soaring over 13%. Richelieu Hardware is climbing 5.7%, and Finning International, Exchange Income, Badger Infrastructure and Bombardier are each advancing 2% to 3%.

Technology and Materials Face Headwinds

By contrast, technology and materials sectors are facing notable pressure. Dye & Durham is declining sharply, down more than 10%, while Blackline Safety Corp and Constellation Software are sliding 5% and 3.5%, respectively. Open Text Corp. and Tecsys are also among the laggards. In materials, weakness is widespread, with Ivanhoe Mines, Ssr Mining, Aya Gold & Silver, Equinox Gold, Endeavour Silver, First Quantum Minerals, Teck Resources and Pan American Silver Corp all posting losses.

Housing Data Shows Acceleration

On the economic front, Canadian housing starts climbed to 282,400 units in December, up from 254,600 units in November, according to data released by Canada Mortgage and Housing Corporation. The improvement reflects renewed building activity heading into the new year.

Disclaimer: The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.