Source: The Canadian Press

The Toronto stock market was set to start October trading with a positive showing after a jump in Chinese manufacturing activity raised hopes for the economic recovery and commodity prices.

The Canadian dollar rose a fifth of a US cent to 97.38 cents US.

New York futures also pointed to a higher open as the Dow Jones industrial futures rose 41 points to 10,764, the Nasdaq futures gained 11.25 points to 2,006.75 while the S&P 500 futures were ahead five points to 1,141.7.

Both oil and copper prices advanced sharply after the state-affiliated China Federation of Logistics and Purchasing said its purchasing managers index, or PMI, rose to 53.8 in September from 51.7 in August. Numbers above 50 show manufacturing activity expanding.

China’s growth cooled in the second quarter to 10.3% from 11.9% in the first quarter and is expected to drift lower. Some forecasters have cut their growth outlook for this year, though they say China easily can meet the government’s target of 8%.

Strong economic growth in China has been a huge benefit to the resource-heavy Toronto stock market and commodity prices. Copper prices in particular have benefited, with prices up more than 10% this year.

On Friday, the December copper contract on the New York Mercantile Exchange gained five cents to US$3.70 a pound.

The November crude contract on the Nymex gained $1 to US$80.97 a barrel.

Crude prices were also supported by data on Wednesday that showed a drop in commercial crude inventories of 500,000 barrels last week. Analysts had forecast an increase of 2.2 million barrels.

Gold prices also moved further into record territory, with the December contract in New York ahead $7 to US$1,316.60 an ounce.

Traders are looking ahead to key data on the U.S. manufacturing sector later Friday. The Institute for Supply Management’s report often sets an early tone for trading each month. Investors could be slightly more optimistic about the manufacturing data after a report Thursday showed manufacturing activity in the Chicago area rose in September.

Economists polled by Thomson Reuters forecast the ISM’s manufacturing index fell to 54.5 last month from 56.3 in August. Any reading above 50 indicates expansion in the sector.

In Asia, Japan’s benchmark Nikkei 225 stock average climbed 0.4%, South Korea’s Kospi added 0.2% while Australia’s S&P/ASX 200 slipped 0.1%.

The upbeat figures from China helped Europe look past its own more disappointing figures. The purchasing managers’ index, a gauge of business activity, for European manufacturing fell in September, suggesting growth in the sector is slowing. The unemployment rate for the 16-nation eurozone, meanwhile, remained above 10% in August, suggesting the labour market will be slow to benefit from any economic recovery.

Stocks markets in Hong Kong and China were closed for public holidays. Mainland Chinese markets will reopen on Oct. 8.

London’s FTSE 100 index gained 0.73%, Frankfurt’s DAX was up 0.24% while the Paris CAC 40 edged up 0.05%.

North American Stock markets enter October trading with strong gains from September, which has the reputation of the worst trading month of the year.

Mostly positive readings from economic data on U.S. manufacturing, home sales and jobs helped push stocks higher and the Dow Jones industrial average had its best September since 1939 with a gain of 7.7%. The TSX gained a more modest 3.8% for the month, but is up 5.3% for the year. The Dow has climbed about 3.5% in the year to date.

In corporate news, Exfo Inc. (TSX:EXF) has sold its Toronto-based life sciences and industrial division to global private equity firm The Riverside Company for US$24.3 million in cash. The maker of equipment for telecom carriers and manufacturers said the division supplied various life sciences sectors with medical device and opto-electronics assemblies, and fluorescence microscopy.

Domtar Corp. (TSX:UFS) sold its Woodland hardwood market pulp mill, hydro electric and related assets in Baileyville, Maine and New Brunswick to International Grand Investment Corp. for US$60 million plus working capital of US$4 million.

Centerra Gold Inc. (TSX:CG) the Toronto-based international gold producer, says unionized workers at its Kumtor Mine in the Kyrgyz Republic began a strike Friday.

Centerra says production at the mine has been suspended and the company is in talks with the union to settle the strike.