Toronto stocks kicked off the new year with a meaty gain on Friday to lift the index to its highest close in 2-1/2 years as a report showing strong US manufacturing lured investors into technology shares.
The Toronto Stock Exchange S&P/TSX composite index rose 72.81 points, or 0.89 percent, to 8,293.70, its best closing level since June 4, 2001.
Some market watchers were convinced a positive start to the year's trading sets the stage for further gains.
"If we get a good few days together it should bode well for the rest of the month," said Douglas Davis, president of Davis-Rea Ltd. "Right now things are looking good for an upward move and it's a market you have to be in."
The US Institute for Supply Management's monthly manufacturing index blew past expectations, jumping to 66.2 in December, up from 62.8 the month before, which was a previous 20-year high.
A strengthening US manufacturing sector would drive up demand for Canadian exports and help Canadian firms.
The information technology and telecommunications sectors both rose 2 percent, while heavily weighted financial issues rose 0.6 percent. All of the TSX's 10 subindexes were higher.
Nortel Networks Corp, the most active issue, ended the session up 28 Canadian cents, or 5 percent, at C$5.77, while contract electronics manufacturer Celestica Inc rose 44 Canadian cents, or 2 percent, to C$20.
Canada's main equity index climbed 24.3 percent in 2003 driven by stronger corporate profits, low interest rates and the prospects of a recovering economy.
Analysts are largely expecting more gains in 2004.
But with many market players still on holiday, market volumes were light, which exaggerated what would otherwise have been more modest movements, analysts said.
Market momentum was positive as 637 issues advanced and 473 declined, while volume was thin with 122 million shares valued at C$1.38 billion ($1 billion) changing hands.
The blue-chip S&P/TSX 60 index, fresh off a 23 percent gain in 2003, rose 4.99 points, or 1.09 percent, to close at 463.71.
US markets were mixed as the market's recent strength and new security alerts put investors on guard despite the upbeat manufacturing report.
The Dow Jones industrial average slipped 44.07 points, or 0.42 percent, to 10,409.85, while the tech-filled Nasdaq composite index scraped out a gain of 3.31 points, or 0.17 percent, to 2,006.68.
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