* Reaches highest level since Sept. 21
* Chinese PMI data give initial boost
* Gold, base metal miners lead gains
By Jon Cook
TORONTO, Oct 24 (Reuters) - Toronto’s main stock index rose more than 1 percent to hit a one-month high on Monday, lifted by encouraging manufacturing data from China and hopes Europe’s leaders will reach a debt deal at a crucial summit this week.
China’s vast manufacturing sector showed signs of life again after a period of contraction, as the country’s flash purchasing managers’ index rose above the 50-point mark for the first time since June. [ID:nL3E7LL1AE]
That had an immediate impact on Canadian resource shares, as commodity prices, including oil, gold and copper rallied. [O/R] [MET/L] [GOL/]
The market was led higher by Suncor Energy (SU.TO), up more than 4 percent to C$31.59, followed by Barrick Gold (ABX.TO), up 3.8 percent to C$46.62, and Goldcorp (G.TO), up 3.7 percent to C$46.65.
“The Chinese number was pretty well responsible for triggering the buying in commodities, and that was most directly having an impact on Canadian stocks,” said Robert Kavcic, an economist at BMO Capital Markets.
“There are fundamental positives that are spurring the market,” he added. “It’s just what happens on Wednesday is going to ultimately decide if stocks can go higher or not.”
Global stocks hit a seven-week high, cheered by hopes that European Union leaders were close to consummating an agreement on bank recapitalization ahead of a key summit on Wednesday. [MKTS/GLOB]
“They’re still dealing with the problems they have in Europe and nothing is worse, nothing is a whole lot better yet, but at least we’re standing where we know where we are,” said Fred Ketchen, director of equity trading at ScotiaMcLeod.
Some progress was made on the weekend in Brussels, with agreements near on how to leverage the European Union’s EFSF rescue fund to try to stop bond market contagion. [ID:nL5E7LM0VD]
At 2:10 p.m. (1810 GMT), the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE was up 196.12 points, or 1.6 percent, at 12,145.52.
The index rose as high as 12,156.03, its strongest level since Sept 21.
The TSX also benefited from better sentiment on U.S. markets after strong earnings from Caterpillar. [.N]
Six of the TSX index’s 10 main sectors were stronger. Health care dropped 4.4 percent, driven down by SXC Health Solutions Corp SXC.TO, the net loss leader.
SXC plunged 20 percent to C$45.17 after U.S. health insurer Cigna Corp <CI.N > said it will buy one of SXC’s biggest customers. [ID:nL3E7LO2FR]
Another big mover was Silvercorp SVM.TO, which surged 17 percent to C$9.56 after it said that a KPMG Forensic report had confirmed its sales figures. The figures had been questioned in an anonymous short-seller report. [ID:nN1E79N0A5]
($1=$1.01 Canadian) (With additional reporting by Claire Sibonney; Editing by Jeffrey Hodgson)