Canada's main equity index held ground Thursday as energy stocks lifted the market, while precious metals retreated on currency headwinds. The Toronto Stock Exchange closed near flat as crude oil rebounded on escalating Middle East geopolitical risk, offsetting weakness in gold and other commodities.
WTI crude rallied 2.3 percent to $72.52 a barrel as tensions between Israel and Iran intensified. The uptick supported energy-heavy Canadian equities, which benefit from higher oil prices. Enbridge and Canadian Natural Resources gained on the day, reversing losses from earlier sessions. Energy represents roughly 13 percent of TSX weighting, making it the primary driver of index movement.
Gold dropped 1.2 percent to $2,411 per ounce as the U.S. dollar strengthened against major currencies. A firmer greenback reduces bullion's appeal for international buyers and weighs on mining stocks. Barrick Gold and Agnico Eagle Mines both retreated, trailing the broader equity market. The yellow metal's weakness reflected investor rotation away from safe-haven assets as risk appetite returned.
The Canadian dollar weakened to 1.3720 against the greenback, pressuring importers but supporting exporters of commodities priced in USD. This currency dynamic creates competing forces across the TSX. Materials stocks faced headwinds from lower precious metals prices while energy names benefited from crude strength.
Copper edged down 0.4 percent to $4.09 per pound as industrial demand concerns persisted, despite Middle East tensions supporting energy prices. The divergence between oil strength and metal weakness reflects separate market drivers. Geopolitical risk supports oil due to supply disruption fears, while copper demand ties directly to global manufacturing activity, which remains soft.
Bank stocks traded mixed as investors assessed the impact of higher interest rates on lending margins. The Bank of Canada maintained its current rate stance, providing little clarity for financial institutions navigating slower economic growth.
The TSX Composite index finishing near unchanged reflects this balance between energy gains and commodity headwinds. Investors now monitor whether Middle East tensions escalate further or de-escalate, which could trigger significant energy repricing. Currency movements will continue shaping relative performance across the index's diverse sectors.