04:58 PM EDT, 04/29/2025 (MT Newswires) -- (Adds commentary in the fourth paragraph.)

The Toronto Stock Exchange recorded its tenth gain in the last 12 sessions on Tuesday, rising following Monday's federal election that kept the Liberal Party led by Prime Minister Mark Carney in power but left the party just a few seats short of a majority in Parliament.

The S&P/TSX Composite Index closed up 75.89 points to 24,874.48. Among sectors, the biggest gainers were Health Care, up 1.48%, and Telecoms, up 0.88%. Energy, down 0.81%, was the biggest decliner.

Tuesday's rise leaves the index down about 1% since U.S. President Donald Trump was inaugurated on Jan. 20, and before he started to threaten the Canadian economy and sovereignty, issues that became central to the platforms for each of the parties that contested the election here.

A statement released Tuesday afternoon said Carney had spoken to U.S. President Trump. A readout of the call said "President Trump congratulated Prime Minister Carney on his recent election. The leaders agreed on the importance of Canada and the United States working together as independent, sovereign nations, for their mutual betterment. To that end, the leaders agreed to meet in person in the near future".

According to Rosenberg Research, last night's Canadian election delivered a Liberal minority government with major implications for Canadian fiscal policy. Rosenberg said with the Liberals already promising major spending increases if they won a majority, it expects the need to make deals with smaller left-wing parties in the minority parliament further increases expected treasury issuance and is a modest support to growth and the loonie. Fiscal stimulus in late 2025 should reduce easing pressure for the Bank of Canada, it added.

The election, Rosenberg noted, was dominated by a sense of Canadian nationalism and a 'rally-round-the-flag' effect that benefited the incumbent Liberals. It said the replacement of the unpopular Justin Trudeau by Mark Carney as leader of the Liberals also played a major role. Smaller parties, the NDP, Bloc Quebecois, and the Greens, were all squeezed, with many voters engaging in strategic voting to keep out the Conservatives, the research added.

"One of our major geopolitical themes for this year has been uncertainty, and this is no exception. A minority parliament avoids the "stability bounce" in the loonie that would have come with a clear majority, and slightly weakens Carney's hand in negotiations with Donald Trump. Conservative leader Pierre Poilievre lost his seat, as did NDP leader Jagmeet Singh, further increasing the uncertainty. Another election could come as early as next year once the NDP resolves their leadership situation -- or, the minority parliament could run for years," Rosenberg noted.

It added: "Judging by the parties' official platforms, we expect to see a significant increase in federal government spending under the Carney Liberals over the life of the parliament."

Elsewhere, National Bank noted the vote centered on who was deemed best positioned to deal with an antagonistic U.S. Administration, while cost of living pressures were likewise top of mind for many voters. Given the severity of the U.S. threat and structural roadblocks to growth, the Liberals ran on a 'Canada Strong' plan that involves net new investments, and thus implies larger deficits and more federal debt, the bank said.

Carney's Liberals, National Bank said, also favour a new approach to federal budgeting, shifting the focus to an operational budget they aim to balance by year four of their mandate. No explicit debt targets were outlined in the Liberal plan, the bank noted. "Regardless, bond investors will be called upon to absorb incremental GoC supply, with non-residents having been a particularly vital source of demand lately," National Bank added.

National Bank said the first most vital piece of business for the Prime Minister will be a quick re-engagement with the U.S. President on trade and security issues, ultimately with a view to lessening the tariff burden and securing predictable access for Canadian exporters.

"With the 'old relationship' with the U.S. essentially over, Canada is in need of a fresh strategy and bold action. The Liberals aim to move on multiple fronts, promoting inter-provincial trade, lessening the personal tax burden, boosting housing supply, among other things. There's an opportunity to re-think Canada's energy strategy too, though quick progress will require revisiting some contentious federal legislation. We view this a worthwhile endeavour, having the potential to strengthen federal-provincial relationships and the national economy at the same time," the bank noted.

Of commodities, West Texas Intermediate crude oil fell for a second day on Tuesday on concerns supply is set to outpace flagging demand. WTI crude oil for June delivery closed down $1.63 to settle at US$60.32 per barrel, while June Brent crude was last seen down $1.65 to US$64.21.

Also, gold eased late afternoon Tuesday as the dollar rose ahead of key U.S. economic data coming this week. Gold for June delivery was last seen down $16.70 to US$3,331.00 per ounce.