-- The Toronto Stock Exchange closed higher on Friday, rising for the eleventh time in 13 sessions on Friday with it appearing to be a case of, as BMO's Douglas Porter put it in the headline of his weekly column, "All Quiet on the (Middle) Eastern Front?" as Iran reopened the Strait of Hormuz to commercial shipping.
The resources-heavy S&P/TSX Composite Index rose 294.06 points, or 0.85%, to close at 34,346.29. leaving it about 200 points off its record high, even with both commodity prices and sectors largely mixed. Not for the first time in the last week, Info Tech led gainers, up 1.85%, followed by Financials, up 1.5%, and then Industrials, up 1.2%. Decliners were led by Energy, down 4.9% as oil prices plunged following Iran's announcement.
According to FactSet, the TSX going in to today up 3.92% month-to-date and up 2,339.47 points, or 7.38%, since the start of the year. It was off 1.42% from its 2026 closing high of 34,541.27 hit March 2.
Within a technical analysis on global equity markets from Rosenberg Research, author Walter Murphy said in a commentary last month he had noted that Canada's TSX index had been probing Fibonacci resistance in the 33,851 area, the last point where the rally from last April's low is 1.618 times the earlier 2023-2025 uptrend. Five weeks later, the index is still probing 33,851. However, between then and now, the index fell to as low as 31,146 before recovering, Murphy said, before adding: that sell-off represented an almost 10% decline and carried the index to within view of 30,808 to 29,378 support.
Underneath this price action, Murphy noted the weekly Coppock Curve continued to decline from its late-February secondary peak. "That is about to change," he said, and added: "There are indications that the oscillator has begun a bottoming process from above its neutral zero line that could continue into mid-May. Under that scenario, the Coppock indicator would likely be in a confirmed uptrend shortly thereafter."
Murphy noted, 33,581 is "important Fibonacci resistance". He said under normal circumstances, March's 34,544 peak would be viewed as a decisive breakout. However, he added, the rapid decline to 31,146 means the TSX will have to prove itself again with a rally through March's high and that, in turn, would allow for further strength toward 35,842. "A possible move to 38,067 is stowed away in the cupboard (not yet on the stove's back burner)."
March's 31,146 low is "key support", Murphy also noted, before saying "a breakdown will complete a top formation and allow for a deep test of 30,808-29,379."
However, Douglas Porter, chief economist at BMO Capital Markets, noted equities are "putting the war in the rear-view mirror". He wrote: "The fact that the ceasefire is holding, a truce was reached in Lebanon, and reports are circulating that the U.S. may buy Iran's uranium -- a potentially elegant solution to two issues -- are buoying the markets. Even the U.S. blockade of Iran made only a fleeting mark on crude prices, with many viewing it as a short-term tactic which could hasten the end of the conflict. Iran further fueled the rally by declaring Friday the Strait is completely open to commercial ships, as long as the ceasefire holds (including no blockade)."
Porter added: "While it's obviously premature to declare the war over, we can now better assess the economic damage, particularly with oil prices simmering down notably. The IMF weighed in this week with its previously scheduled semi-annual World Economic Outlook. While the tone was downbeat, or at best cautious, what was remarkable was how little the Fund changed its global growth outlook from its January update. Based on the main mild scenario, growth is expected to cool only slightly this year to 3.1%, from 3.4% in both its initial projection and for actual growth in 2025. The Fund noted that last year's growth rate ended up matching precisely the forecast at the start of 2025, as a variety of policy support measures offset the trade war impact -- clearly a lesson for assessing the impact of this year's war as well. We shaved our forecast for global growth a bit more than the IMF to 2.9% for this year, presumably based on a somewhat higher assumption for oil prices."
Meanwhile, Porter in the same note said even with a tamer inflation outlook than, "well, just a week ago", markets are "stubbornly clinging" to the view that the Bank of Canada will hike rates later this year. Porter noted GoC yields nudged only slightly lower this week, and the market is still priced for one full hike in 2026. "True," he said, "that's down from almost three hikes just a few weeks ago, but it still looks heavy to us." Porter noted while the economy may have rebounded in February after a tough winter, GDP is up only 0.6% y/y and employment is up only 0.4% y/y, while housing remains in a deep slumber and trade uncertainty remains high as the USMCA review looms. "Our view thus continues to be that the best policy course for the Bank is to stand still, and if anything with an easing bias," he added.
Of commodities today, West Texas Intermediate crude closed sharply lower after Iran reopened the Strait of Hormuz to commercial traffic, freeing up tankers trapped in the Persian Gulf and ending a supply shock that sent prices to four-year highs. WTI crude oil for May delivery closed down US$10.84, or 11.5%, to settle at US$83.85 per barrel, while June Brent oil was down US$9.45 to US$89.94.
Gold was higher by midafternoon Friday as Iran reopened the Strait of Hormuz to commercial traffic, ending the largest ever energy supply shock and easing inflation fears. Gold for May delivery was up US$75.30 to US$4,883.60 per ounce.