CANADA STOCKS-TSX rises as gold, other commodities firm

* TSX rises 1.13 percent to 10,822.14

* Gold at 3-month high spurs materials group

* Other commodities have positive tone, lifting appetite
(Adds details)

By Ka Yan Ng

TORONTO, Sept 3 (Reuters) - Toronto's main stock index was
higher on Thursday morning, mirroring gains made on overseas
markets on encouraging news from China that spurred investor
willingness to take risk.

Firming commodity prices were particularly supportive for
Toronto's resource-heavy index. Its energy group was up 1.3
percent, while materials, home to the gold miners, advanced 1.8
percent.

Gold rallied to a three-month high, building on the last
session's gains, to above $985 an ounce. Oil headed towards $69
a barrel on economic hopes. The Reuters-Jefferies CRB index
.CRB, the basket of 19 commodity futures, was up 0.14
percent.

Top risers on the Toronto market included oil companies
Canadian Natural Resources (CNQ.TO), up 2.11 percent at
C$62.92, and EnCana (ECA.TO), up 1.5 percent at C$55.89.

Some gold shares also glittered for a second day. Barrick
Gold (ABX.TO) was up 1.6 percent at C$42.59, while Iamgold
(IMG.TO) rose 3.5 percent to C$14.28.

"Commodity prices are relatively strong. Oil is up slightly
but the other commodities -- gold has really taken off, copper,
the CRB index -- are pretty strong here," said Ian Nakamoto,
director of research at MacDougall, MacDougall & MacTier.

"I think there's no doubt the economy is recovering here."

At 10 a.m. (1400 GMT), the S&P/TSX composite index
.GSPTSE was up 120.82 points, or 1.13 percent, at 10,822.14.

All of the index's 10 main groups were higher, including
the heavyweight financials group, which rose after three days
of declines in the past four sessions. It was up 1.4 percent,
helped by a 1 percent climb in Bank of Nova Scotia (BNS.TO).

The TSX's gains followed strength in overseas markets where
emerging stocks .MSCIEF gained, and Shanghai stocks .SSEC
climbed after China's top regulator assured investors that the
country's market was healthy. The health of Chinese stocks has
often been seen lately as a barometer of economic optimism.

($1=$1.11 Canadian)
(Reporting by Ka Yan Ng; editing by Peter Galloway)