TORONTO (Reuters) - Canada's main stock index advanced on Monday to reach its highest in 2-1/2 years as shares of smartphone maker BlackBerry jumped and bullish economic data from China helped drive gains in every major sector.
Investors were encouraged by data that showed China's economy grew 7.7 percent in 2013. The gain was flat from 2012 but above market expectations for 7.6 percent expansion.
BlackBerry shot up 8.2 percent as the short position in the stock waned and after a Pentagon announcement last week indicating the company's devices were a core part of its mobile strategy.
The Toronto Stock Exchange's benchmark S&P/TSX index, which has risen in nine of the last 10 sessions, is up about 2.7 percent this year.
"There's some optimism out there. The confidence is coming back slowly, which is a good sign," said Adrian Mastracci, portfolio manager at KCM Wealth Management.
"A lot of investors are probably treading water and taking positive news from China," he added.
The S&P/TSX composite index .GSPTSE closed up 102.08 points, or 0.74 percent, at 13,990.29, its highest level since mid 2011.
After lagging the S&P 500 .SPX in 2013, the TSX has so far this year outperformed U.S. stock markets, which were closed on Monday for the Martin Luther King Jr. holiday. That weighed on trading volume.
About 217 million shares changed hands, compared with an average daily volume of about 316 million shares in December, according to Thomson Reuters data and figures from market operator TMX Group.
"From now on, you'll see the TSX performing with, or a little bit better than, the U.S. market," said David Cockfield, a portfolio manager at Northland Wealth Management.
"We're getting back to a calmer, less jittery market," he added. "People are going to be more interested in long-term performance and what the fundamentals for stocks look like."
All of the 10 main sectors on the index were higher.
Financials, the index's most heavily weighted sector, gained 0.9 percent. Royal Bank of Canada (RY.TO), the country's biggest lender, added 1.4 percent to C$72.86. Bank of Nova Scotia (BNS.TO) rose 1.6 percent to C$64.88.
The materials sector, which includes mining stocks, advanced 1.6 percent. Barrick Gold Corp (ABX.TO) jumped 4.6 percent to C$21.56, and diversified miner Teck Resources Ltd TCKb.TO climbed 1.5 percent to C$29.10.
In corporate news, Australian uranium producer Paladin Energy Ltd (PDN.AX) PDN.TO agreed to sell a stake in its Namibia mine. The company's shares were up 9.1 percent in Toronto at 60 Canadian cents.
BlackBerry Ltd (BB.TO), which surged as much as 18 percent in early trading, closed at C$10.80.
The Pentagon indicated last week that BlackBerry phones account for roughly 98 percent of devices being supported as part of a program aimed at bringing greater mobile access to Department of Defense employees.
The news helped calm fears that BlackBerry is losing ground in its core security-conscious user base.
Further, data from Markit indicated that the level of short-interest in the stock has dropped, with the percentage of shares out on loan having fallen to below 10 percent for the first time in nine months. Citron Research, run by California-based investor Andrew Luck, who is known for short-selling stocks, last week praised the company's recent strategic direction, leading to a bump in the stock on Friday.
Editing by Peter Galloway