Nov. 11 (Bloomberg) -- Canadian stocks rose, led by raw- materials producers, after increases in China’s industrial production and Japan’s machinery orders ignited a rally in commodity prices.

Kinross Gold Corp., Silvercorp Metals Inc. and Consolidated Thompson Iron Mines Ltd. climbed as prices for gold, silver, copper, lead and zinc increased. Potash Corp. of Saskatchewan gained as agricultural commodity prices rose. Stocks pared their advance as the U.S. dollar rebounded after touching a 15-month low, curbing the gains in commodities.

The Standard & Poor’s/TSX Composite Index added 13.01 points, or 0.1 percent, to 11,439.75 as of 4:10 p.m. in Toronto after rising as much as 1.2 percent earlier. The main benchmark for Canadian equities, up 27 percent year-to-date, fell 0.5 percent yesterday, its first drop in six days.

“The U.S. dollar has been under considerable pressure,” said Paul Gardner, a portfolio manager at Avenue Investment Management in Toronto, which oversees C$125 million for individual investors. “That’s causing a bid to underlying commodities like gold and oil. Naturally that positively effects the Canadian stock market because it’s so heavily weighted to cyclicals.”

Chinese industrial production increased 16.1 percent from a year earlier in October, the biggest gain since March 2008, the country’s statistics bureau said today. Japanese machinery orders rose 10.5 percent in September from August.

Materials producers account for almost 20 percent of the market value of the S&P/TSX.

Mining Companies

Kinross Gold, Canada’s third-largest producer of bullion, added 0.9 percent to C$20.50. Silvercorp, an extractor of silver, lead and zinc, rose 5.5 percent to C$6.48. Consolidated Thompson, a miner of iron ore, added 3.6 percent to C$5.23.

Gold futures touched a record $1,119.10 an ounce on the New York Mercantile Exchange’s Comex division as declines in the value of the dollar spurred demand for stores of value. The dollar fell to a 15-month low against a basket of six major currencies including the euro and the yen before rebounding.

Potash, the largest fertilizer maker, gained 1.8 percent to C$106.52 as prices for wheat and soybeans rose.

Research In Motion Ltd., maker of the BlackBerry mobile phone, rose for a fifth straight day since announcing a plan to buy back as many as 21 million shares. RIM gained 1.5 percent to $67.78 and contributed the most to the index’s advance.

Finning International Inc. fell 4.2 percent to $15.48. The world’s largest dealer of Caterpillar Inc. earthmoving equipment reported third-quarter earnings excluding some items 43 percent lower than the average analyst estimate as Canadian sales declined. Finning earned 13 Canadian cents a share on that basis, compared with an average estimate of 23 cents.

Shoppers Drug Mart Corp. dropped 1.6 percent to C$43.79. Canada’s largest pharmacy chain reported third quarter earnings of 79 Canadian cents a share, less than the average analyst estimate of 80 cents a share.

To contact the reporter on this story: Elizabeth Stanton in New York at estanton@bloomberg.net

Last Updated: November 11, 2009 16:21 EST