* Analysts say TSX could revisit 2012 high of 12,788.63 * Global macro factors driving Canadian equities * Resource stock performance tied to China, commodities By Solarina Ho TORONTO, Oct 28 (Reuters) - Promising global economic news could lift Canadian stock prices out of their autumn lull to 2012 highs by the end of the year, offsetting tepid U.S. corporate results and modest earnings expectations at home. Signs that China's growth slowdown has bottomed and Europe's debt crisis may be contained, combined with a U.S. housing market showing signs of life, could propel Toronto's resource-heavy stock market higher, strategists and fund managers said. "The macro picture has been really driving the bus and obviously that hits emerging markets and their demand for base materials," said Rick Meslin, head of Canadian equities at UBS Securities Canada, noting early signs of a global turnaround. "Despite the earnings out of the U.S. that have been kind of lukewarm, I think that's still going to be offset with overall growth," he added. Toronto Stock Exchange's S&P/TSX composite index hit a five-month high of 12,529.77 on Sept. 14, the day after major stimulus measures from the U.S. Federal Reserve sparked a global stock-market and commodity-price rally. HOPES REST WITH CHINA The index, which closed at 12,300.30 on Friday, has struggled since, partly because of disappointing profits and outlooks from U.S. companies. It is up about 10 percent from 2012 lows set in June, but less than 3 percent from the start of the year. The Toronto index has underperformed its U.S. counterparts this year. The Nasdaq has climbed nearly 15 percent from the start of the year, while the S&P500 has advanced more than 12 percent. Much of that lag is due to double digit losses recorded by base metal miners, with Teck Resources Ltd and others hurt by the prospect of weaker Chinese demand for commodities. "I do think the markets will respond well between now and the end of the year, not so much for the earnings, but for the news at the margin, which is a little bit better than expected overseas," said Pat McHugh, Canadian equity strategist at Manulife Asset Management. "It's predicated on continued positive news out of China." The fortunes of Canadian resource companies, which make up nearly half the value of the Toronto market, are closely bound to those of China, the world's biggest buyer of iron ore and other commodities. China reported expectations of stronger fourth-quarter factory output earlier this month, while a purchasing managers survey signaled the country's economy is making a slow, steady recovery from its weakest period of growth in three years. "Things seem to be in a reasonably stable position, so I think we could see the TSX have another positive quarter ... I think we could reach 13,000," said David Cockfield, managing director and portfolio manager at Northland Wealth Management. A Reuters poll of 21 market strategists last month predicted the index will climb to 12,800 by the end of the year. "At the end of the day, the fundamentals are more positive than what the valuations would suggest ... We do think the highs of 2012 can be taken out at some point," said Craig Fehr, Canadian market strategist at Edward Jones. The index's 2012 peak was 12,788.63, set on Feb. 29. U.S. EARNINGS DISCOURAGE Not everyone is as bullish. Gregory Nott, chief investment officer at Russell Investments, expects the index to finish the year around 12,400. "We don't see a lot more gains in the TSX through the end of this year," said Nott, citing U.S. earnings, little movement in commodities, and the risk of the so-called fiscal cliff that is set to hit the U.S. economy hard in 2013 unless Congress acts. Recent Chinese economic data will support commodity prices, Nott said, but won't drive them much higher. On the earnings front, investors have been dismayed by gloomy corporate results from major U.S. multinationals such as Apple Inc, Amazon.com Inc, General Electric Co , McDonald's Corp. With 244 companies in the S&P 500 having reported through Thursday, about two-thirds have beaten earnings expectations, according to Thomson Reuters data. But revenue for the quarter has been more disappointing. Only 36.3 percent of those companies reported higher-than-expected revenue, compared with a historical beat rate of 62 percent. Most Canadian companies have yet to report earnings, but results so far have been respectable. Goldcorp Inc, Agnico Eagle Mines Inc, Canadian Pacific Railway Ltd and Rogers Communications Inc have all posted results strong enough to push their shares higher. Still, most analysts are looking more at the global trend rather than local results for signals of whether to buy. "A rising tide is going to lift all boats, is my honest view," UBS's Meslin said.