The Canadian stock market closed on a positive note on Friday, with the TSX composite index gaining nearly 100 points. The boost was driven by strength in energy and financial stocks, while U.S. markets experienced a mixed day.
Investors shifted away from riskier tech stocks towards dividend and low-volatility stocks due to geopolitical tensions. Israel’s strike on Iran overnight raised concerns, although Iran’s decision not to retaliate helped ease tensions. However, the markets remained cautious heading into the weekend.
The energy sector saw a slight increase, with the TSX composite energy index up over 0.5%, mirroring the climb in the financials index. Utilities and telecom stocks also benefited from the flight to safety, rising by 0.9% and 0.6% respectively.
On the other hand, the information technology sector was one of the biggest drags on the index, declining by almost 0.7%. U.S. markets saw larger downswings in technology stocks, with Netflix dropping around nine percent after announcing plans to reduce financial disclosures.
Overall, the S&P/TSX composite index closed up 98.93 points at 21,807.37, while the Nasdaq composite closed down 2.05% at 15,282.01. The Dow Jones industrial average was up, and the S&P 500 index was down.
Investors are anticipating fewer rate cuts from the U.S. Federal Reserve this year, as inflation data remains high. The shift in rate expectations has led investors to trim risks, while solid earnings but cautious guidance from companies have also contributed to the market’s cautious stance. Geopolitical concerns have further boosted commodities, with gold reaching new highs and the Canadian dollar trading at 72.74 cents US.