March 10 - Canadian stock index futures ticked higher on Tuesday as strength in gold helped offset a steep pullback in crude oil, leaving investors cautious given the resource-weighted composition of the Toronto market.
March futures on the S&P/TSX composite index were up 0.4% as of 5:57 a.m. ET. U.S. stock futures also posted modest gains as renewed hopes for a swifter resolution to the Middle East conflict reduced immediate energy-driven inflation concerns.
Toronto’s benchmark index had closed higher the previous session after briefly touching its lowest intraday level since February 6. Market moves were driven in part by remarks on Monday that the conflict with Iran could end soon - comments that contributed to a rapid slide in crude prices from levels that had earlier spiked. Oil fell below $100 after having jumped as high as $119 the day before.
The oil market remained highly volatile. In the session following the jump, crude slumped by as much as 11% after rallying more than 20% on Monday, a swing that reverberated through Canada’s commodity-heavy equity market. G7 nations indicated on Monday that they stood ready to take "necessary measures" to curb surging oil prices, while stopping short of committing to a release from emergency reserves.
Precious metals provided a counterweight. Spot gold was trading marginally up at $5,182.85 per ounce as of 0954 GMT, while U.S. gold futures for April delivery rose 1.9% to $5,199.70. Those gains helped temper the impact of the crude sell-off on broader sentiment.
Investors are set to focus on upcoming economic data for further direction. U.S. inflation figures and Canada’s jobs report, both due later in the week, are expected to be closely watched for signals about the monetary policy outlook. The timing of these releases comes as the Bank of Canada confronts mounting geopolitical and supply-side risks ahead of its March 18 policy decision.
In corporate news affecting Canadian markets, Scotiabank downgraded Air Canada to "sector perform" from "sector outperform" and reduced its target price to C$21 from C$27.
Market participants described the current environment as one of heightened responsiveness to geopolitical developments and incoming macroeconomic data, with commodities and financials especially sensitive to rapid shifts in oil and gold prices.