Canadian Markets In Red Amid A Plume Uncertainties Over PM Justin Trudeau’s Resignation

Canada, a G7 country and the second largest country in terms of area size, has been hit by a fresh set of instability. The country’s long-serving prime minister, who is the de facto head of state, has announced that he will resign as the Prime Minister of Canada.

Markets React To Crisis In Canada

This is a post that he assumed in the turn of a fresh page in Canadian politics about a decade ago. This appears to have impacted the equity markets in Canada as well.

The equity markets, which had a decent cumulative average in the recent past, at least the past five trading sessions have been placated by these developments.

Trudeau has been in the middle of a maelstrom of unpopularity in Canada amid myriad crises that have enveloped his government and his legacy at large. The cost of living, unemployment, housing and immigration crisis, supplemented by Trudeau’s focus on identity politics, has resulted in his downfall.

While he is expected to continue at the top office until a change in leadership ensues in his (the governing) Liberal Party of Canada. His powers are expected to be truncated. Trudeau will be a ‘lame duck’ PM heading a minority government, with no ability to power through any legislation in the Canadian parliament.

S&P/TSX Composite Index

When we take a closer look at the development at the Canadian equity markets, the value of the TSX Composite Index at the Toronto Stock Exchange, which is the benchmark index, dropped in value by 0.29 per cent or 73.75 points.

This took the cumulative value of the index with 70 per cent of the total market capitalization to 24,999.79, pushing it below the milestone mark of 25,000 points. In the past month of trade, the index has gained 1.35 per cent or 332.73 points of its value.

However, over the past month, the picture looks bearish as the overall decline stood at 2.69 per cent or 692.01 points.

Canadian Dollar

The Canadian Dollar stood at 1.43 units against a singell US dollar at the end of January 6.

Elections in Canada

The quadrennial Canadian parliamentary election is slated to happen later this year (2025), around October. However, given the political instability, these election could be held early. The resurgent Conservative Party’s Pierre Poilievre is Trudeau’s challenger.