SAN FRANCISCO (MarketWatch) -- Canadian stocks got off to a solid start Monday, led by energy and materials on hopes that a massive stimulus package announced by the Chinese government will be bullish for commodities.
The benchmark S&P/TSX Composite Index was up 146.83 points, or 1.5%, to 9,743.04.
On the Toronto Stock Exchange, advancers led decliners 589 to 460.
Five of the TSX's 10 component sector gauges were higher, led by energy, up 2.8%, and materials, up 3.2%.
Crude-oil futures initially rallied 7% early Monday, lifted by the prospect of stronger energy demand from China after Beijing's weekend announcement. But they turned lower in early afternoon trading. See Futures Movers.
Suncor Energy was up 6.7% and Canadian Natural Resources was 5.1% higher.
Gold futures climbed as much as $35 an ounce Monday, touching their highest level in nearly two weeks. See Metals Stocks.
Yamana Gold Inc. rose 3.4% and Kinross Gold Corp. was up 4.6%.
Teck Cominco , the world's second-largest zinc producer was 2.4% higher.
China's state-run news agency, Xinhua, reported that the two-year, 4 trillion yuan ($586 billion) program "will loosen credit conditions, cut taxes and embark on a massive infrastructure spending program in a wide-ranging effort to offset adverse global economic conditions by boosting domestic demand." See full story.
Nortel Networks was down 17.5%.
The network-equipment supplier posted a third-quarter loss of $3.41 billion Monday after it recorded several large one-time charges and saw a sharp drop in sales as customers cut spending to cope with the economic downturn. See full story.
On the domestic data front, Canadian housing starts slipped 3.1% in October, but remained at a still-elevated 211,800 annualized units. A separate report showed Canadian new house prices rose 0.1% in September.
"Canadian residential construction activity has held steady since 2003 thanks to strong multiple-unit starts and strength in Western Canada, two sources of support that are likely to wane in the coming quarters," wrote Robert Kavcic, economist at BMO Capital Markets.
In currency trading, the Canadian dollar was at $C1.920 against its U.S. counterpart, which rose 0.3%.
