Greek debt deal spurs TSX to five-month high

Tue Feb 21, 2012 4:55pm EST
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By Jon Cook

TORONTO (Reuters) - Canadian stocks surged to a five-month high on Tuesday, with mining and oil shares leading the way, as risk appetite grew after euro-zone finance ministers sealed a bailout package for Greece.

The 130 billion euro ($172 billion) deal was finalized after euro-zone officials forced Athens to commit to unpopular cuts and as private bondholders agreed to accept deeper losses. <MKTS/GLOB> It means Greece will not default on 14.5 billion euro in bond redemptions due next month.

"This is about taking the downside risk off the market, but it doesn't give you the upside part of the equation," said George Vasic, equity strategist and chief economist at UBS Securities Canada. "It's got to be sustained by good (global) economic data."

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE finished up 165.06 points, or 1.3 percent, at 12,623.36, its biggest one-day gain since January 3 and its highest level since September 8, 2011.

Signs that Europe's debt crisis is being stabilized and of health in the U.S. recovery have rallied the TSX more than 5 percent so far this year.

In the United States, the Dow touched 13,000 on Tuesday for the first time since just before the financial crisis took hold in 2008. .N

Nearly all of the TSX index's 10 main sectors were higher, led by the heavily weighted materials group, which gained 3 percent.

Gold miners led the way, with Barrick Gold (ABX.TO: Quote) up 3 percent at C$48.25 as the world's top gold miner rode higher bullion prices. Goldcorp (G.TO: Quote) climbed 2.9 percent to C$48.16 and Yamana Gold Inc (YRI.TO: Quote) jumped 4.5 percent to C$17.13.   Continued...

Two men walk down the street from the King and Bay intersection in the financial district in Toronto February 22, 2011.    REUTERS/Mark Blinch