TSX Wraps Up 2023 with Gains, Sets Positive Tone for 2024

Despite grappling with inflationary pressures, Canadian stocks rebounded from the previous year's declines, ending 2023 with an impressive 8% increase.

Canada’s primary stock index closed the year on a positive note, with gains driven by the energy and financial sectors.

The S&P/TSX composite index on the Toronto Stock Exchange (TSX) increased by 29.06 points, or 0.14%, reaching 20,958.44 on the final trading day of 2023, marking its third consecutive weekly gain.

Despite grappling with inflationary pressures, Canadian stocks rebounded from the previous year’s declines, ending 2023 with an impressive 8% increase.

This renewed optimism is fueled by expectations of a potential interest rate cut by the Bank of Canada in 2024.

Brandon Michael, senior investment analyst at ABC Funds, commented on the market’s resilience in 2023, stating, “In 2023, equity markets showed remarkable resilience, providing a significant snapback stock market recovery as the major stock market indices ascended the proverbial wall of worry.

There remain many reasons to be optimistic and bullish on stocks in 2024, with a strong economy, resilient consumers, declining inflation, and positive earnings surprises.”

In contrast, U.S. stocks closed slightly lower on the last trading day of the year, despite a robust year-end rally driven by expectations of looser monetary policy in the coming year.

Within Canada’s stock market, the energy sector saw a 0.3% increase, benefiting from rising crude oil prices. The financial sector also rose by 0.3%, finishing the year with an 8.7% gain.

The information technology sector had the most substantial annual gains, surging nearly 57%, largely thanks to a remarkable 123% increase in Shopify’s stock price.

However, on the final trading day of the year, the tech sector experienced a 1.4% decline, pulling down the broader tech index.

Healthcare stocks had an outstanding year, with a 23% increase, marking the index’s first gain in six years.

In contrast, the materials sector, including precious and base metals miners, as well as fertilizer companies, struggled, dropping by 0.4% on the last day of the year and 2.9% for the entire year.

This decline was influenced by lower prices of gold and copper, driven by a strengthening U.S. dollar.

Trading activity remained subdued as investors took a break for the year-end holiday. The TSX was closed on January 1st for New Year’s Day.

On the corporate front, a U.S. court granted approval for Hut 8 to proceed with its full mining operations plan related to the Celsius Network bankruptcy proceedings.

However, Hut 8’s shares reversed earlier gains, closing nearly 17% lower on the day.