The Canadian dollar and Toronto Stock Exchange both gained Monday, pushed higher by an almost $4 spike in the price of crude oil.

The S&P/TSX composite index closed with a gain of 212.79 points, or 1.78 per cent, at 12,162.28.

European leaders met over the weekend to hammer out a solution to the continent's escalating sovereign debt crisis. After apparently productive meetings, leaders pledged to come out with a comprehensive plan by Wednesday.

That new optimism was a shot in the arm for the world's economy, which pushed oil prices higher.  A barrel of crude for December delivery closed at $91.27, up $3.87.

New York markets fared well, though they lagged the commodity-heavy TSX. The Dow Jones Industrial Average was up 0.89 per cent to 11,913.62, while the broader S&P 500 index was 1.29 per cent higher at 1,254.20.

The technology sector was also a source of strength, with New York's Nasdaq exchange up 61.98 points or 2.35 per cent at 2,699.44.

Commodity prices were up across the board, buoyed by the European news but also by an HSBC report that showed China's manufacturing sector is once again picking up steam.

The bank's China Manufacturing Purchasing Managers' Index climbed to 51.1 on a 100-point scale, up from 49.9 in September.

Among key sub-components of the survey, manufacturing output rose to a six-month high of 51.7, picking up from 50.3 in September, and above the 50 level which indicates expansion.

"The data provide reassurance that China will avoid the hard landing over which some market participants have expressed concern," Scotia Capital currency strategist Eric Theoret said of the news.

Widely-traded December gold was up $16.20 at $1,652.30 an ounce.

The Canadian dollar was up 0.55 of a cent at 99.69 cents US. Normally a strong commodities rally would have sent the loonie even higher, but investors are looking ahead to the Bank of Canada's latest interest rate decision, expected later this week.

With files from The Canadian Press