TORONTO (Reuters) - Toronto's main stock index rallied to its highest close in more than a month on Monday, lifted by encouraging manufacturing data from China and optimism that European leaders may soon strike a deal to fix the euro-zone debt crisis.
Resource shares were the big gainers as oil, copper and other commodity prices rallied. <O/R> <MET/L>
Suncor Energy (SU.TO) jumped 4.3 percent to C$31.58, and Teck Resources TCKb.TO climbed 5.8 percent to C$36.80 after Chinese data that showed a rebound in manufacturing activity, which eased fears of an abrupt slowdown in the world's second-largest economy.
"A lot of that is probably short-covering. But still, I think that's driving our markets," said Sal Masionis, stockbroker at Brant Securities.
Bullion prices also rose, moving in line with risk assets rather than safe-haven investments, as European leaders edged closer to a solid plan to resolve the euro zone crisis. <GOL/>
European Union leaders meeting in Brussels on Sunday neared agreement on bank recapitalization and on how to leverage their rescue fund to try to stop bond market contagion. But final decisions were deferred until a second summit on Wednesday.
"What happens on Wednesday is going to ultimately decide if stocks can go higher or not," said Robert Kavcic, an economist at BMO Capital Markets.
The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended up 212.79 points, or 1.78 percent, at 12,162.28, its highest close since Sept 20.
TSX sentiment also benefited from a jump in U.S. stock markets on Monday after strong earnings from Caterpillar and some proposed acquisitions. .N
Six of the TSX index's 10 sectors were in positive territory. Health care dropped 5.5 percent, driven down by insurer SXC Health Solutions Corp SXC.TO, which plunged 23 percent to C$43.52 after U.S. health insurer Cigna Corp <CI.N > said it will buy one of SXC's biggest customers.
Another big mover was Silvercorp (SVM.TO), which surged 17 percent to C$9.60 after it said that a KPMG Forensic report had confirmed its sales figures. The figures had been questioned in an anonymous short-seller report.
Brant Securities' Masionis noted that the year-end for U.S. mutual funds in October is a good time for buyers, and that there will be a slew of Canadian earnings reports later this weel, which have a chance to move the market. "The guidance will be the key," he added.
Additional reporting by Jon Cook; editing by Peter Galloway