The Toronto stock market was sharply higher late Monday morning, led by surging resource stocks, after European leaders pledged to unveil concrete steps to deal with the region's debt crisis by mid-week.
A jump of almost 6 per cent in the mining group helped send the S&P/TSX composite index up 148.51 points to 12,098, as commodity prices were also supported by strong Chinese economic data.
European leaders met over the weekend to hammer out details of a broad plan for the debt crisis. The plan, expected Wednesday, is likely to include measures to recapitalize the region's banks, who are likely to accept steep losses on Greek debt, as well as boost the euro zone bailout fund.
"We don't really know, we just anticipate something good, which is not a bad assumption either," said Sid Mokhtari, market technician at CIBC World Markets.
"We don't know how they will address it, but at least we know they are trying to give a message to the market that they do have a grand plan for this whole debt crisis in Europe."
The TSX Venture Exchange rose 21.06 points to 1,553.97
The Canadian dollar advanced a day before the Bank of Canada's scheduled announcement on interest rates. The central bank is widely expected to leave its key rate unchanged at 1 per cent and the loonie was up 0.43 of a cent at 99.57 cents U.S.
Positive earnings helped push U.S. markets higher as the Dow Jones industrial index gained 82.42 points to 11,891.21.
The world's largest construction and mining equipment maker. Caterpillar reported that third-quarter net income rose to $1.14 billion (U.S.), or $1.71 per share, which beat estimates of $1.57 a share. Its shares were up 4.85 per cent to $91.63 in New York.
Shares in Vancouver-based Finning International , the world's biggest Caterpillar dealer, ran ahead $1.01 to $22.72.
The Nasdaq composite index rose 52.57 points to 2,690.03, while the S&P 500 futures were up 13.46 points to 1,251.71.
Oil and metal prices advanced, supported by data showing an expanding Chinese economy.
HSBC's preliminary — or "flash" — China Manufacturing Purchasing Managers' Index climbed to 51.1 on a 100-point scale, up from 49.9 in September.
Among key sub-components of the survey, manufacturing output rose to a six-month high of 51.7, picking up from 50.3 in September, and above the 50 level which indicates expansion.
"The data provide reassurance that China will avoid the hard landing over which some market participants have expressed concern," said Scotia Capital currency strategist Eric Theoret.
The TSX energy sector gained 1.6 per cent as the December crude contract on the New York Mercantile Exchange gained $2.36 to $89.76 (U.S.) per barrel. Suncor Energy moved up 53 cents to $30.80 and Canadian Natural Resources climbed 33 cents to $33.99.
Copper prices also took off after slumping over 5 per cent last week, with the December copper contract in New York ahead 15 cents to $3.37 (U.S.) per pound. China is the biggest consumer of the metal, which is often used as a barometer for economic well being as it is used in so many applications, from wiring to infrastructure. The base metals sector climbed 5.86 per cent as Teck Resources rose $1.79 to $36.59 and First Quantum Minerals gained $1.54 to $17.53.
Canadian Pacific Railway rose alongside mining stocks, ahead 83 cents to $59.61. Elsewhere in the industrials sector, Bombardier Inc. gained eight cents to $4.07.
Bullion prices advanced with the December contract up $18.10 to $1,654.20 (U.S.) per ounce, pushing the gold sector up 2.35 per cent. Barrick Gold Corp. ran up $1.23 to $46.15 and Goldcorp Inc. improved by $1.23 to $46.23.
The information technology sector was also supportive, up 2.82 per cent with Research In Motion Ltd. ahead 89 cents to $23.89.
In Asia, Japan's Nikkei 225 index added 1.9 per cent after the government said exports grew for a second straight month in September. The country's trade suffered a five-month decline in the wake of the March 11 earthquake and tsunami that devastated northeast Japan.
Mainland Chinese shares rose in the wake of the HSBC report.
European bourses were positive with London's FTSE 100 index up 0.9 per cent, the Paris CAC 40 was ahead 1.33 per cent, Frankfurt's DAX gained 1.4 per cent.
In other corporate news, shares of Silvercorp Metals Inc. shot up $1.32 or 16.14 per cent to $9.50 after the company said an investigation had found its accounting and financial reporting accurate, despite allegations by short sellers to the contrary.
ATS Automation Tooling Systems Inc. shares fell 44 cents or 6.49 per cent to $6.19 after the company said discussions to spin off its solar-energy subsidiaries have ended without an agreement. It plans to explore further possibilities for a sale of some or all of those assets.
Managed-care company Cigna Corp. said it will buy fellow health insurer HealthSpring Inc. in a $3.8-billion (U.S.) deal that would boost Cigna's Medicare Advantage business. Cigna shares were ahead 21 cents to $44.91 (U.S.).