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By Nivedita Balu
(Reuters) -Canada’s main stock index recorded its best year since 2021 on Tuesday, the last trading day of the year historically considered as favorable for equities, navigating a number of macroeconomic and global uncertainties in 2024.
The S&P/TSX composite index gained 18.5% in 2024. It was up 107.35 points, or 0.44%, at 24,727.94 on Friday, largely boosted by energy stocks.
“What truly defined 2024 was the broadening participation of the rally. This breadth of market leadership is emblematic of bullish sentiment, reflecting renewed investor confidence and enthusiasm,” said Brandon Michael, senior investment analyst at ABC Funds.
In the United States, the bellwether S&P 500 notched more than a 23% gain, marking the index’s best two-year run since 1997-1998, while the Nasdaq surged nearly 30%. [.N]
Looking ahead to 2025, market participants have scaled back their expectations for significant rate cuts by the Fed in 2025 and are preparing for potential policy shifts with Donald Trump’s return to the White House.
“While we anticipate volatility, we expect the market to climb higher in a sawtooth pattern, ultimately reaching new highs,” Michael said.
Investors will focus on upcoming monthly employment data from Canada and the United States, which will offer insights into the monetary policy direction in both countries.
The TSX index, however, fell 3.4% in December, its first in six months and its worst since May 2023, as the U.S. Federal Reserve’s hawkish policy announcement and domestic political uncertainty made investors cautious.
The commodity-heavy index benefited on Tuesday as the energy sector gained 1.5%, tracking higher oil prices. [O/R]
Most sectors inched higher, with communication services gaining 1.3% gain, materials gaining 0.9%, healthcare adding 0.6%.
Most markets across the globe, including Canada, will be closed on Wednesday on account of the New Year holiday.
(Reporting by Ragini Mathur in Bengaluru; Editing by Shreya Biswas and Alistair Bell)
