China and EU optimism drives TSX to 1-month high

Mon Oct 24, 2011 5:03pm EDT
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By Claire Sibonney

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: Quote) 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/>

Goldcorp (G.TO: Quote) was up 3.2 percent at C$46.44, and Barrick Gold (ABX.TO: Quote) added 3.4 percent to C$46.45.

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.   Continued...

<p>An electronic board displays the midday TSX index in Toronto February 16, 2011. REUTERS/Mark Blinch</p>