Reuters Poll Predicts TSX in Canada Will Continue Record-Breaking Rally as Metal Prices Surge

The Toronto Stock Exchange (TSX) is poised to reach record highs this year as metal prices surge and lower borrowing costs support the Canadian economy, according to a recent Reuters poll.

Since the beginning of the year, the TSX has already gained 7.2%, surpassing its previous record closing high set in March 2022. Analysts are optimistic about the market’s continued upward trajectory, citing robust earnings and anticipated interest rate cuts.

Investors are betting on the Bank of Canada to announce a easing cycle in its upcoming policy meeting on June 5, following a drop in the annual inflation rate to a three-year low of 2.7%.

The poll of 21 portfolio managers and strategists predicts the TSX Composite Index to rise by 0.1% to 22,500 by the end of 2024, higher than the previous forecast of 21,750. By the end of 2025, the index is expected to soar to 24,300, an 8.2% increase.

The positive outlook is driven by expectations of a recovering domestic economy, which would benefit bank stocks, and a global economic upturn, which would boost resource shares. Metal prices, including gold and copper, have already reached record highs, further supporting the market’s growth.

While a correction in the market is always a possibility, analysts believe it is unlikely in the coming months due to the strong momentum and favorable economic conditions.