The Evergrande episode is likely an isolated event, which may not have a long-term impact on Canadian stocks. If retail investors of the TSX continue to receive the same kind of financial support from the government, the market can continue to grow in similar fashion. These subsidy measures created demand, and the growth of the Canadian stock market owes in part to this.Īlso read: Canada Budget 2021 Analyzed: How Freeland Invoked Keynes? The support extended to families and businesses by the government has supported the economy amid the slump. The new Trudeau-led government is likely to focus on stimulus program to avoid any blame. Despite a month of election campaigning, billions of dollars on conducting the earlier-than-scheduled election, there seems no clear majority for any party.

The Liberal Party’s win can be marred by criticism over more or less the same composition of the House as it was after the 2019 general election. Trudeau’s snap election call may face criticism The Liberal platform also talks of minimum 15 per cent tax rate imposed on high earners. The index has produced negative returns on YTD basis, which means the stocks may be available at cheaper prices.Īlso read: 3 best TSX energy stocks to buy in September The return is modest as compared with the oil and gas index but the new government’s focus on green energy is likely to be a booster.

It tracks green and sustainable stocks and has returned almost 14.5 percent over past one year. In light of Liberals’ inclination toward clean energy, let’s look at the returns of the S&P/TSX Renewable Energy and Clean Technology Index. Image description: S&P/TSX Equal Weight Oil & Gas Index returns. The YTD return of the index is nearly 32 per cent. This index has returned a whopping 48 per cent over past one year. The S&P/TSX Equal Weight Oil & Gas Index tracks a portfolio of companies in oil and gas sector. Oil companies may now need to comply with benchmarks to limit emissions. On the Liberal platform, the mention of phase out of fossil fuel subsidies by 2023, instead of earlier deadline of 2025, can become a cause of concern for related industries. The most interesting aspect of the snap election was bipartisan support to fight against climate change. This can be attributed to a range of factors, which include the recent resurgence of the Delta variant and the weaker-than-expected economic growth. Both the Bank Index and the parent Composite Index have seen subdued performance over past one quarter. The year-to-date (YTD) return is nearly 20 per cent. The TSX Composite Index Banks (Industry Group) has given nearly 37 per cent return over past one year. The S&P/TSX Composite Index Banks (Industry Group) is made up of bank constituents of the benchmark index. By reading between the lines, it can be easier to understand which stocks are likely to outperform in the near-to-medium term.Īlso read: Canada snap election 2021: How a Liberal win could impact stock marketsįirst, the platform included a new revenue source – 3 per cent tax on profits of banks. Liberals have focused on continued financial support to the ailing economy. Your portfolio must consider Liberals’ platform But even a minority government can bring many changes, and it is these changes that can impact stocks listed on the TSX. Prime Minister Justin Trudeau called the snap election to gain majority and pass legislations that the Liberal Party thinks can improve the socio-economic landscape of Canada. Liberals, however, are far from what they sought – majority in the House of Commons. The Conservatives, led by Erin O’Toole, are a distant second, albeit their vote share is more than Liberals. The Elections Canada website points to a big lead for the Trudeau-led Liberal Party. Image source: Pixabay Who’s winning the 2021 Canadian snap election? While China’s Evergrande episode may have caused the Toronto Stock Exchange (TSX) to face its worst day in months on Monday, the snap election can bring a breather. Major events shape markets in their own ways. Markets in the US, Australia and nearly all emerging economies have gained amid the pandemic-induced macroeconomic odds. The rally in Canadian stocks was not an isolated event. The S&P/TSX Composite Index, the benchmark of the Canadian market, hit 20000-mark in June this year. The pandemic may have cost people their jobs and wage hikes, but it could not keep the global stock market from scaling new peaks. Creating a portfolio that can create wealth is no mean task.

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