The Toronto stock market was higher in early trading on Monday as commodities prices picked up and the results of stress tests of Spain’s banking sector were received with cautious optimism.
The S&P/TSX composite index moved ahead 70.58 points to 12,388.04, while the TSX Venture Exchange crept up 9.34 points to 1,343.85.
The Canadian dollar gained 0.15 of a cent to 101.86 cents US.
The results of an independent audit of 14 Spanish banks were released after the market close on Friday and showed the lenders need an extra C60 billion (US$77.6-billion) in capital. The figure is roughly as expected and well within the C100 billion in rescue loans that Madrid can get from fellow euro zone countries to help the banks.
But there was still concern that Moody’s ratings agency could downgrade Spain’s debt rating to junk status.
Meanwhile, the latest reports on global manufacturing showed that economies are still under pressure.
China’s Purchasing Managers’ Index for September came in at 49.8, marking a further contraction in activity in the region. Meanwhile, the euro zone’s manufacturing sector experienced a better month, though its September PMI still contracted for the 14th consecutive month.
The Commerce Department, meanwhile, said overall construction spending in the U.S. dipped 0.7 per cent in August compared to July.
On Wall Street, the Dow Jones industrials rose 73.18 points to 13,510.31. The Nasdaq composite index lifted 17.78 points to 3,134.01 and the S&P 500 index was up 8.74 points to 1,449.41.
In commodities, November crude on the New York Mercantile Exchange gained 69 cents to US$92.88 a barrel. The TSX energy sector was up one per cent.
The gold sector moved 1.5 per cent higher as gold prices climbed to the levels of last November. December gold bullion increased $11.30 to US$1,785.20 an ounce, while December copper was down nearly one cent at US$3.75 a pound.
In Canadian corporate developments, Magna International Inc. (TSX:MG) said it has signed a deal to buy Ixetic Verwaltungs GmbH, a manufacturer of automotive vacuum, engine and transmission pumps for C308 million. The company also said a subsidiary has signed a deal with a joint-venture partner to buy the remaining 50 per cent stake in STT Technologies, a supplier of transmission and engine oil pumps. Shares of Magna rose 2.1 per cent, or 89 cents, to $43.40.
Wi-LAN Inc. (TSX:WIN) said it has bought a portfolio of more than 150 patents and patent applications from Alvarion Ltd. for $19-million. Its shares rose three cents $5.56.
In Europe, Germany’s DAX stock index rose 1.4 per cent to 7,315.30 and France’s CAC-40 was up 1.5 per cent to 3,405.34. Britain’s FTSE 100 rose 1.4 per cent to 5,819.65.
In Asia, markets in China, Hong Kong and South Korea were closed for public holidays. In Tokyo, Japan’s benchmark Nikkei 225 index fell after a closely watched survey showed confidence in the economy weakening.
The Nikkei 225 index shed 0.8 per cent to 8,796.51. Toyota Motor Corp. lost 1.7 per cent and Nishimatsu Construction Co. slid 4.2 per cent.