TSX adds to weekly gains as technology shares climb

Published in Science and Technology on Friday, July 25th 2025 at 17:07 GMT by reuters.com
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Canada's main stock index rose to a record high on Friday, with technology shares leading gains as investors turned attention to key events next week, including a Bank of Canada policy decision.

TSX Extends Weekly Gains Amid Surge in Technology Shares

TORONTO, July 25, 2025 – Canada's benchmark stock index, the S&P/TSX Composite, closed higher on Friday, capping off a positive week driven primarily by a robust performance in technology stocks. The index added to its recent gains as investors shrugged off lingering concerns about inflation and interest rates, focusing instead on strong earnings reports from key tech players and broader market optimism. This upward momentum reflects a broader trend in North American markets, where technology sectors have been leading the charge amid expectations of continued innovation and economic recovery.

The TSX rose by 0.8% on the day, closing at 22,450.12 points, marking its third consecutive session of gains. Over the week, the index climbed approximately 1.5%, building on the previous week's advances and signaling a potential shift towards a more bullish sentiment among investors. Technology shares were the standout performers, with the sector index jumping 2.3%, fueled by impressive quarterly results from major Canadian tech firms and positive spillover from U.S. counterparts like those in the Nasdaq.

Leading the charge was Shopify Inc., the Ottawa-based e-commerce giant, whose shares surged 4.5% after reporting better-than-expected revenue growth in its latest earnings release. Analysts attributed this to a rebound in online retail spending and the company's successful expansion into international markets. "Shopify's performance underscores the resilience of the tech sector even in a high-interest-rate environment," said Sarah Thompson, a senior equity analyst at RBC Capital Markets. "We're seeing sustained demand for digital solutions, which is insulating these companies from broader economic headwinds."

Other tech heavyweights contributed significantly to the rally. Lightspeed Commerce Inc. saw its stock rise 3.2%, buoyed by optimistic guidance on future sales amid a recovery in small business spending. Meanwhile, OpenText Corp. gained 2.8%, benefiting from increased enterprise demand for its cloud-based software solutions. These gains helped offset weaknesses in other sectors, such as energy and materials, where commodity prices remained volatile due to global supply chain disruptions and geopolitical tensions.

The energy sector, a traditional pillar of the TSX, experienced a modest decline of 0.4% on Friday, pressured by fluctuating oil prices. West Texas Intermediate crude settled at $78.50 per barrel, down slightly from earlier in the week, as concerns over Middle East conflicts were tempered by reports of increased U.S. production. Major players like Suncor Energy Inc. and Canadian Natural Resources Ltd. saw their shares dip by 1.1% and 0.9%, respectively. Despite this, some analysts remain cautiously optimistic, pointing to potential upside if global demand picks up in the latter half of the year.

Materials stocks also lagged, falling 0.6%, with mining companies feeling the pinch from softer metal prices. Gold, often seen as a safe-haven asset, traded flat at around $2,380 per ounce, while copper prices edged lower amid worries about slowing growth in China, a major consumer of industrial metals. Nutrien Ltd., a key fertilizer producer, dropped 1.3%, reflecting broader challenges in the agricultural commodities market.

In contrast, financial stocks provided some stability, edging up 0.5%. Royal Bank of Canada and Toronto-Dominion Bank both posted gains of about 0.7%, supported by steady lending activity and positive outlooks on consumer spending. The sector's performance was bolstered by recent comments from the Bank of Canada, which hinted at a possible pause in rate hikes if inflation continues to moderate. Canada's consumer price index rose 2.7% year-over-year in June, slightly below expectations, offering some relief to policymakers and investors alike.

Market participants are increasingly turning their attention to upcoming economic data and corporate earnings. Next week's releases, including U.S. Federal Reserve minutes and Canadian GDP figures, could provide further clarity on the interest rate trajectory. "The TSX's resilience this week is a testament to the diversified nature of the Canadian economy," noted Michael O'Brien, chief investment strategist at TD Securities. "While tech is stealing the spotlight, we can't ignore the underlying strength in financials and the potential for energy to rebound."

Broader market dynamics also played a role in Friday's session. The Canadian dollar strengthened against its U.S. counterpart, trading at 73.5 U.S. cents, up from earlier lows, as oil prices stabilized and investor confidence grew. This currency appreciation could have mixed effects, potentially boosting importers but challenging exporters in sectors like manufacturing.

Looking beyond the immediate gains, experts are debating the sustainability of this tech-driven rally. Some warn that valuations in the technology sector are approaching bubble territory, reminiscent of the dot-com era, while others argue that advancements in artificial intelligence, cloud computing, and cybersecurity will drive long-term growth. "We're in a transformative phase for tech," said Emily Chen, a portfolio manager at CIBC Asset Management. "Companies like Shopify and Lightspeed are not just surviving; they're innovating in ways that position them for exponential growth."

The TSX's performance mirrors trends in global markets. In the U.S., the S&P 500 and Nasdaq Composite also ended the week higher, with tech titans such as Apple and Microsoft leading the way. European indices, however, were more mixed, with the FTSE 100 in London dipping amid Brexit-related uncertainties and the DAX in Germany gaining on strong manufacturing data.

Investor sentiment in Canada remains cautiously optimistic, with trading volumes on the TSX up 5% from the previous week, indicating heightened activity. Retail investors, in particular, appear to be piling into tech stocks, drawn by the allure of quick gains in a sector that has outperformed the broader market year-to-date. The TSX tech index is up over 15% so far in 2025, compared to a 7% gain for the overall composite.

As the trading week wrapped up, market watchers are already eyeing potential catalysts for the coming sessions. Geopolitical developments, including ongoing trade negotiations between Canada and its major partners, could influence commodity-sensitive sectors. Additionally, the earnings season is far from over, with more reports expected from consumer discretionary and healthcare firms.

In summary, the TSX's weekly gains highlight the pivotal role of technology in driving market momentum, even as other sectors face headwinds. This divergence underscores the evolving landscape of the Canadian economy, where digital innovation is increasingly taking center stage. Investors will be watching closely to see if this trend can hold amid potential economic uncertainties on the horizon.

The day's top gainers included not only tech firms but also select consumer stocks, such as Loblaw Companies Ltd., which rose 1.2% on strong grocery sales data. On the flip side, telecom giant BCE Inc. fell 0.8%, weighed down by competitive pressures in the wireless market.

Overall, the session provided a fitting end to a week that saw the TSX navigate through a mix of domestic and international factors. With technology shares climbing to the forefront, the index's trajectory suggests a market that is adapting to new realities, prioritizing growth-oriented sectors over traditional resource-based ones. As we move into the next trading period, the balance between optimism and caution will likely define the path ahead for Canadian equities.

This rally comes at a time when global markets are grappling with inflationary pressures and monetary policy shifts. In Canada, the central bank's recent decision to hold rates steady has been interpreted as a signal of confidence in the economy's underlying strength. However, persistent supply chain issues and labor market tightness continue to pose risks.

Experts like Thompson from RBC emphasize the importance of diversification. "While tech is hot right now, a balanced portfolio that includes stable sectors like financials and utilities can help mitigate volatility," she advised. Indeed, utility stocks on the TSX were up 0.3% on Friday, providing a defensive buffer.

In the broader context, the TSX's performance is intertwined with North American economic indicators. U.S. jobless claims came in lower than expected this week, boosting confidence in a soft landing for the economy. This positive data rippled across borders, supporting Canadian stocks.

As the sun sets on another trading week, the TSX stands as a beacon of resilience, with technology shares illuminating the way forward. Whether this momentum translates into sustained growth remains to be seen, but for now, investors are riding the wave of innovation and optimism.

Read the Full reuters.com Article at:
[ https://www.reuters.com/markets/europe/tsx-adds-weekly-gains-technology-shares-climb-2025-07-25/ ]

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TSX adds to weekly gains as technology shares climb

TSX Extends Weekly Gains Amid Surge in Technology Shares