* TSX ends up 123.56 pts, or 1 pct, at 12,485.59
* Largest one-day jump since Jan. 25
* Gold miners, energy issues lead gains
* U.S. data, Greek deal hopes lift sentiment
By Jon Cook
TORONTO, Feb 16 (Reuters) - Canadian stocks notched their biggest single-day gain this month on Thursday as gold-mining earnings, higher oil prices and strong U.S. economic data boosted resource shares, while euro-zone debt fears eased.
Fourth-quarter earnings from Canada's top gold producers initially failed to excite, but on closer inspection sharp dividend increases by Kinross Gold and Agnico-Eagle won over investors. Kinross and Agnico shares both jumped 7 percent to C$11.07 and C$36.57 respectively.
"You look at the valuations and they appear to be cheap," said Joe Tatusko, chief investment officer at brokerage firm Westport Resources in Connecticut. "Any sliver of good news is going to have these guys move."
Shares of the country's two biggest gold miners, Barrick Gold and Goldcorp also rose but by a smaller margin as both reported solid quarterly results and continued success in their exploration programs. Goldcorp jumped 4.5 percent to C$47.25, while Barrick was up 1 percent to C$48.
The Toronto Stock Exchange's S&P/TSX composite index finished up 123.56 points, or 1 percent, at 12,485.59, its highest close in a week and its biggest one-day rise since Jan. 25.
Oil and gas issues also drove gains, rising more than 1 percent after Brent crude prices hit an eight-month high above $120 a barrel on Iran supply concerns and an expected drop in North Sea output.
Energy gains were led by Canadian Natural resources , which rose 1.8 percent to C$37.07. Encana Corp jumped 4.4 percent to C$20.15 ahead of reporting fourth-quarter results on Friday.
Cenovus Energy was up 1.4 percent at C$38.61 after Canada's No. 2 independent oil producer said on Wednesday its quarterly profit tripled on production gains.
Nexen Inc's shares gained 4 percent to C$19.71, after the oil and natural gas company reported a sharp drop in fourth-quarter profit, but said it was meeting production targets and showing some progress.
Risk sentiment was helped by upbeat data that suggested the U.S. economic recovery remained healthy as jobless claims fell to a near a four-year low and housing starts rose in January.
In Europe, talks to secure approval of a second Greek bailout showed signs of progress after a euro zone official said leaders were finishing the details of a package worth at least 130 billion euros ($169.5 billion).
Financial issues rose, led by Manulife Financial, which climbed 4.6 percent to C$12.59.
A disorderly default by Athens would wreak havoc with liquidity in European financial markets due to hefty Greek debt holdings in the form of credit default swaps and insurance policies.
"Once you start bringing up liquidity issues in the market, the market becomes extremely tentative, if not negative," said Gareth Watson, vice-president of investment management and research at wealth management firm Richardson GMP.