Source: The Canadian Press

The Toronto stock market advanced Friday amid further dividend increase announcements by several major Canadian companies, and moves by the Chinese government to choke off inflation.

The S&P/TSX composite index rose 72.53 points to 13,239.47 — its highest close since early September, 2008 — while the TSX Venture Exchange was up 15.42 points at 2,124.3.

The Canadian dollar moved higher against its U.S. counterpart amid data showing Canada’s trade deficit with the rest of the world narrowed sharply in October, falling to $1.7 billion from $2.3 billion in September.

The loonie rose 0.11 of a cent to 99.07 cents US.

People’s Bank of China told commercial lenders Friday to increase minimum reserves by 0.5% of deposits, the latest in a string of measures in recent weeks to cool inflation that rose to a 25-month high of 4.4% in October, well above the government’s 3% target.

“I think people expect there to be some muting of economic growth in China, so we’re back in sort of a sustainable growth phase,” said Chris King, portfolio manager at Morgan, Meighen and Associates.

“And that’s not a bad thing. You don’t want to be booming and busting and we’ve seen the impacts of having hurry up and collapse, certainly in our credit markets. Sustainability is best for everyone involved.”

Moves by China to rein in its hot economy have often had a negative effect on the Toronto stock market. That’s because strong demand from China has helped push the resource heavy TSX up about 13% this year, led by gains in commodity stocks amid higher prices for oil and metals.

Economic growth in China is expected to remain robust, around 9% over the next couple years, even with rate hikes.

Fresh economic data raised expectations that China would follow through with a hike in interest rates.

China’s exports jumped 34.9% in November from the year-ago period, up from a reading of 22.9% growth in October and surpassing the 22.4% increase expected by economists.

Imports also greatly exceeded expectations, rising 37.7% on top of a 25.3% gain in October.

Financials were the biggest advancer, with Manulife Financial (TSX:MFC) ahead 91 cents at $16.89 while Scotiabank (TSX:BNS) climbed 56 cents to $66.

Lift on the TSX also came from the telecom sector after BCE Inc. (TSX:BCE) said it was boosting its dividend by 7.7%, increasing the annual payout to $1.97 a share for 2011. Its stock rose $1.02 to $36.09.

The gold sector was up slightly even as bullion prices lost ground with the February contract in New York down $7.90 to US$1,384.90 an ounce. Goldcorp Inc. (TSX:G) faded 30 cents to $46.50.

Shares in Iamgold Corp. (TSX:IMG) climbed 49 cents to $17.62 as the company raised its annual dividend by 33%. The company also said 2011 gold output is expected to rise about 20% above its current forecast production for 2010.

The strong Chinese trade data spark a rise in copper prices as the March contract on the Nymex gained two cents at US$4.11 a pound.

The base metals sector was the biggest percentage advancer, ahead almost 3% as Teck Resources (TSX:TCK.B) rose $2.28 to $57.90 while Inmet Mining (TSX:IMN) ran ahead $3.35 to $78.26.

The energy sector racked up modest gains as crude slipped with the January crude contract on the New York Mercantile Exchange off 58 cents to US$87.79 a barrel. Imperial Oil (TSX:IMO) gained 26 cents to $37.72 while Canadian Natural Resources (TSX:CNQ) was down 33 cents at $42.24.

New York markets were higher as other data showed the U.S. trade deficit narrowed sharply in October to $38.7 billion, the lowest level in nine months.

Also, the widely-watched University of Michigan’s consumer sentiment gauge rose during this month and reached its highest level since June.

The Dow Jones industrials closed up 40.26 points at 11,410.32.

The Nasdaq composite index rose 20.87 points to 2,637.54 and the S&P 500 index was ahead 7.4 points to 1,240.4.

Also supporting New York markets was an announcement from Dow industrial General Electric Co. that it was boosting its quarterly dividend by two cents to 14 cents per share. That marks a 17% increase and the second time the company has raised its quarterly dividend this year. GE shares rose 59 cents to US$17.72.

The TSX ended the week up 150.52 points or 1.14%, leaving the index up 12.7% year to date, while the Dow industrials inched up 28 points.

In other corporate news, Garda World Security Corp. (TSX:GW) posted third-quarter profit of $6.3 million, or 20 cents per share, an increase from $1.4 million, or four cents a share, a year ago. Revenue rose to $282.5 million from $263.4 million and its shares declined 23 cents to C$9.52.

And drugmaker Pfizer announced it will withdraw its hypertension treatment Thelin, citing liver problems among patients overseas. Its shares rose 26 cents to US$17.02.