(Bloomberg) -- August was a wild ride for Canadian stock investors. And it doesn't look like September is going to get any better.
Not just as yet anyway.
The S&P/TSX Composite fell as much as 0.4% in early trading as U.S.-China trade tensions show no sign of easing and uncertainties around Brexit remain. Stocks in Europe and Asia fell Tuesday, and American stock indexes also slumped.
In all the geopolitical skirmishness, what could stem the slide of Canada's stock market is the soaring price of commodities. Gold futures advanced as investors sought haven assets, while silver and platinum -- which have been playing catch-up with the precious metal -- also gained. Nickel soared after major ore supplier Indonesia brought forward a ban on exports.
For the first time this year, Canada's stock market diverged from the S&P 500 Index's performance with a slight gain, thanks to the heavy contribution of commodity-related stocks. Materials make up almost 12% of the benchmark.
And as investors brace for what could be the another volatile month -- typically the worst month of the year for Canadian stocks -- some are calling the bottom.
Read more: Think August Was Bad? Here Comes Worst Month for Canadian Stocks
Javed Mirza, an analyst at Canaccord Genuity, says investors should add exposure to equities as market sentiment and selling volume suggest that the “intermediate-term corrective phase that began in July has likely run its course.” The decline in selling volume on major North American equity indexes indicates that equity holders are reluctant to cut their holdings at current levels, Mirza said in a report.
“Friday's close above 16,407 confirms a new intermediate-term uptrend is taking hold,” he said. The S&P/TSX Composite ended last week at 16,442.07.
To contact the reporter on this story: Divya Balji in Toronto at dbalji1@bloomberg.net
To contact the editors responsible for this story: Madeleine Lim at mlim131@bloomberg.net, Rita Nazareth
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