FX.co ★ TSX Flat Amid US-Iran Tensions and Rising Inflation

The S&P/TSX Composite Index hovered near the 34,000 level on Monday, closing essentially flat as escalating geopolitical risks and persistent inflation kept investors on edge. Markets were rattled after the United States seized an Iranian vessel, prompting Tehran to retaliate by reinstating its blockade of the Strait of Hormuz and ruling out further negotiations before the ceasefire’s April 21 expiry.

The renewed disruption to global shipping drove oil prices sharply higher, stoking fresh stagflation worries and weighing on the outlook for financials, as the prospect of higher-for-longer interest rates and subdued credit demand pressured banks. Domestic borrowing costs were also pushed up by a rebound in inflation, with Canada’s annual rate accelerating to 2.4% in March as the Middle East conflict pushed transportation costs higher. Even so, shares of major lenders including TD and BMO were broadly stable.

Gold miners retreated as US Treasury yields climbed, with Agnico Eagle shedding more than 2.5% and Barrick falling about 2%. In contrast, energy producers advanced in step with the rally in crude: Canadian Natural Resources and Suncor each gained roughly 1%, while Cenovus rose nearly 2%.