TSX rise one percent to 12,454.89

TSX rise one percent to 12,454.89Canada's main stock index, Toronto Stock Exchange's S&P/TSX composite index rose 1.1 percent or 138.77 points to 12,454.89 following a deal on to avoid the fiscal cliff situation in the US.

The index was mainly boosted by the strong performance by the materials sector stocks, which began increase following indications from the US that the lawmakers are arriving on a deal to avoid the fiscal cliff situation, which would have introduced automatic spending cuts and tax rises.

Positive manufacturing data from China has also helped boost investors sentiment in Canada, besides the fiscal budged deal in the US. The Chinese manufacturing index has helped increase iron ore and copper prices in the global market and benefiting resource rich countries like Canada. China's Purchasing Managers' Index has increased to 50.6 in December, recording a third month of growth indicating the economy is on the path of strong growth in the coming year.

The US senators have finally passed a legislation to avoid the automatic changes in the taxes and spending in the US economy. With a pre-dawn vote of 89-8, the senate will now be able to avoid a combination of automatic tax increases and spending cuts. The law now paves the way for a decision in the House of Representatives, where the vote is expected on Tuesday or Wednesday.