Canadian stocks advanced on Thursday amid lower oil and metal prices and encouraging employment data from the United States.

The S&P/TSX Composite Index gained 35.82 points, or 0.29 percent, at 12,553.48 while the S&P/TSX Venture Composite Index added 23.26 points, or 1.42 percent, at 1,660.57.

A day before the release of the U.S. non-farm payrolls report for January, the U.S. Labor Department said that weekly unemployment applications fell 12,000 to a seasonally adjusted 367, 000. The four-week average, a less volatile measure, dropped for the third straight week to 375,750, which is the second-lowest level for the four-week average since June 2008.

Stock markets rallied Wednesday following strong manufacturing data from China and the U.S. and a report from payroll firm ADP that the American private sector created 170,000 jobs last month. Economists were looking for the U.S. economy to have created a total of 150,000 jobs in January.

Employment figures for Canada will also come out on Friday and economists expect the economy cranked out about 24,500 jobs during January.

The base metals and mining sector rose 0.47 percent while investors were encouraged by some major deal-making news in the resource sector.

Mining company Xstrata PLC confirmed Thursday that it is in merger discussions with commodities trader Glencore International PLC, a deal that would create an industry giant with around 175 billion U.S. dollars worth of revenues. Xstrata said that Glencore had proposed an all-share merger of equals. Glencore cautioned that there was no certainty of an offer being made.

The merged mining giant would operate businesses around the world, including major nickel mining and refining businesses in Canada, where Xstrata owns the former Falconbridge nickel company.

Crude oil prices continued to weaken following data Wednesday showing that U.S. oil inventories rose much more than expected last week. The March crude oil contract on the New York Mercantile Exchange was down 98 cents to 96.78 U.S. dollars a barrel and the energy sector climbed 0.57 percent.

The gold sector was ahead 1.15 percent with April gold down 12. 80 U.S. dollars at 1,762.3 U.S. dollars an ounce. Barrick Gold Corp. advanced 0.87 percent to 49.72 Canadian dollars.

The financial sector was the biggest decliner, down 0.45 percent as Royal Bank of Canada shed 0.66 percent to 52.93 Canadian dollars per share.

Shares in Scotiabank fell 0.89 percent to 51.38 Canadian dollars after the bank said Wednesday it planned to raise 1.5 billion Canadian dollars in an offering of common shares that would be used to pay for recent acquisitions.

On the currency front, the Canadian dollar slipped 0.01 of a cent to 100.10 U.S. cents after the loonie closed above parity with the U.S. dollar Wednesday for the first time since late October. One U.S. dollar was buying 0.999 Canadian dollars at 5 p. m. local time (2200 GMT) on Thursday, compared with one U.S. dollar purchasing 0.9985 Canadian dollars on Wednesday.