05/28/2012 08:28 EDT | Updated 07/28/2012 05:12 EDT

TSX, commodities higher as survey raises hopes for Greek pro-bailout parties

TORONTO - The Toronto stock market was higher Monday, building on last week's advances with sentiment improved by weekend polls indicating Greeks want to stay in the eurozone and hopes that China will take steps to stimulate its economy.

The S&P/TSX composite index gained 51.69 points to 11,628.16 while the TSX Venture Exchange climbed 14.46 points to 1,323.72.

On the corporate front, Canadian Pacific Railway (TSX:CP) was in in focus with the federal government expected to introduce back-to-work legislation late in the day to end the strike by 4,800 CP workers.

Mediated contract talks between Canada's second-largest railway and the Teamsters union representing locomotive engineers and conductors collapsed Sunday. Pensions, as well as work rules and fatigue management have been major points of contention in the bargaining process. CP shares lost 47 cents to $76.70.

The Canadian dollar benefitted from higher commodities and increased risk appetite, rising 0.46 of a cent to US$97.59 cents US.

U.S. markets are closed for the Memorial Day holiday, which typically results in subdued stock trading globally.

Traders were encouraged after surveys over the weekend showed that Greeks still want their country to keep the euro currency and not revert back to the drachma.

Surveys showed Greece's New Democracy party came first in all six opinion polls published on the weekend. That party backs the tough austerity measures that have made it possible for the country to exist on international bailouts.

The survey results were released three weeks before Greeks return to the polls after May election results proved inconclusive. But markets were unnerved after political parties opposed to the bailout terms received unexpectedly high support, raising worries that Greece could exit the eurozone.

Such a move would extend financial turmoil in the country and spread financial difficulties to other nations using the euro.

The TSX ran ahead 2.6 per cent last week, snapping a three-week losing run as traders feeling the market was looking oversold picked up stocks beaten down during May. But the TSX is still down a good six per cent from May 1. Worries of a slowing global economy have also taken a toll and the TSX has dropped more than nine per cent since the 2012 highs of late February.

Commodities headed higher Monday morning amid expectations that the Chinese government is now ready to move on adding more stimulus to the economy.

The National Development and Reform Commission, China’s top economic planner, has approved three large steel construction projects. The approval follows a promise by w Premier Wen Jiabao last week to encourage pro-growth policies.

China has also weighed on stocks and commodities because economic growth in the world's second-biggest economy has headed lower as the government deals with high inflation. The country has been a major prop for a global economy still struggling to recover from the 2008 financial collapse and subsequent recession.

The July crude contract on the New York Mercantile Exchange was up 51 cents to US$91.37 a barrel in electronic trading on the New York Mercantile Exchange. The energy sector was ahead 0.8 per cent as Suncor Energy (TSX:SU) climbed 35 cents to $29.22.

The base metals sector advanced a bit over one per cent as the Chinese report helped push copper two cents higher to US$3.47 a pound. China is the world's biggest consumer of the metal, which in turn is largely viewed as an economic barometer because it is used in so many industries. Teck Resources (TSX:TCK.B) was ahead 31 cents to $31.53.

Bullion also advanced, up $6 to US$1,574.90 an ounce, taking the gold sector up 0.4 per cent. Barrick Gold Corp. (TSX:ABX) rose 33 cents to $41.57.

Financials were up 0.5 per cent while Royal Bank (TSX:RY) climbed 41 cents to $50.76.

Techs declined with Research In Motion Ltd. (TSX:RIM) shares down nine cents to $11.25 following a report that the BlackBerry maker is preparing for a major restructuring. The Globe and Mail reported that RIM could end up cutting at least 2,000 jobs worldwide. It said the announcement could come just before RIM reports quarterly results on June 2.

Traders also looked to a slew of key economic data being released this week, including manufacturing data for China and the U.S., gross domestic product figures for Canada and the U.S. and the week ends with the release of the American non-farm payrolls report for May.

European bourses were positive with London's FTSE 100 index ahead 0.74 per cent while Frankfurt's DAX gained 0.47 per cent and the Paris CAC 40 inched up 0.06 per cent.

Although the Greek polls provided hope that Greece will stay in the eurozone, there were still worries about how the government debt crisis is hurting other southern European countries .The interest rate, or yield, for 10-year Spanish government bonds on the secondary market — a key indicator of market confidence — was up 13 basis points to 6.42 per cent.

The spike came as Spanish lender Bankia said it needs a €19 billion bailout, raising questions about how Spain intends to find the money.

A rate of seven per cent is considered unsustainable over the long term and there is concern that Spain might soon be pushed join the ranks of Greece, Ireland and Portugal and seek an international bailout.

Asian stock markets closed modestly higher. Japan’s Nikkei 225 index settled 0.2 per cent higher, Hong Kong’s Hang Seng added 0.5 per cent and Australia’s S&P/ASX 200 rose one per cent.

In mainland China, the Shanghai Composite Index climbed 1.2 per cent and the smaller Shenzhen Composite Index shot up 1.4 per cent.

In other corporate news, IT manager Softchoice Corp. (TSX:SO) has been awarded a purchase agreement with the U.S. Department of the Navy worth a maximum of US$700 million. The Toronto-based company — which works with organizations to select, acquire and manage their software and hardware technology resources — said Friday it won the contract to provide the U.S. Navy with Microsoft software licensing and software services. Its shares were unchanged at $12.11.