Canadian Markets Pare Gains as Tech Selloff Offsets Materials Rally

The Canadian equity market started strong on Tuesday but pared some of its early momentum as the session progressed, with technology stocks becoming a notable drag on the benchmark index. However, strength in precious metals prices provided a significant lift to materials-related equities, while rising crude oil levels supported the energy sector. The S&P/TSX Composite Index, which opened at 32,289.03 and reached an intraday high of 32,540.07, ultimately settled at 32,323.91, gaining 140.03 points or 0.43% from the previous close.

Materials Stocks Lead the Rebound on Bullion Surge

The Materials sector emerged as the session’s clear winner, with the Materials Capped Index climbing 4.5% as gold and silver futures surged dramatically, rising over 8% and 13% respectively. This metals rally sparked significant buying interest across precious metals producers. Taseko Mines posted the sector’s strongest performance, surging more than 12%, while Teck Resources, Aya Gold & Silver, First Majestic Silver Corp., Aris Gold Corporation, G. Mining Ventures, Ivanhoe Mines, Hudbay Minerals, Oceanagold, Perpetua Resources, Endeavour Silver Corp and Silvercorp Metals all advanced 7% to 9%.

Energy Sector Gains Ground Despite Market Pullback

Energy stocks demonstrated solid gains, benefiting from elevated crude oil prices that supported producer valuations. The sector’s largest movers included Vermilion Energy, Baytex Energy and International Petroleum Corp, each posting gains between 3.7% and 4.5%. Imperial Oil, Enerflex, Tamarack Valley Energy, Headwater Exploration, Athabasca Oil Corp., Peyto Exploration, Paramount Resources and Cenovus Energy moved forward 2% to 3% for the session.

Defensive Sectors Find Footing

Consumer staples stocks provided another area of relative strength as investors rotated into defensive holdings. Loblaw Co. and George Weston led this segment with gains of 2.5% and 2.3% respectively, while Empire Company, Metro Inc., The North West Company and Alimentation Couche-Tard also posted notable advances.

Technology Shares Face Sharp Correction

The Information Technology Capped Index experienced a sharp reversal, declining nearly 6% as heavy selling pressure mounted across the sector. The decline was broad-based, with Shopify and CGI Group dropping 8% to 9%, joined by significant declines in Descartes Systems Group, Lightspeed Commerce, Constellation Software, Tescys, Kinaxis, Open Text Corporation, Coveo Solutions and BlackBerry. This sector weakness offset the gains generated by materials and energy strength, ultimately limiting the broader market’s upside and causing the TSX to pare its early session advances as sector rotation took hold.